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Recently, we conducted a poll asking Chartered Accountants about whether they aimed to be part of the Finance Team or the Investment Team.
The results showed that a significant percentage chose the latter.
However, if are working in auditing, CFO advisory, or finance roles, and want to join a renowned VC firm, you may be in for a rough surprise.
Your chances are quite slim, probably because you lack the domain expertise required for such a role.
But don’t get disheartened. Here are some tips on how you can find opportunities that may lead you to a role on the Investment side of a VC firm.
1. Domain / Sector Expertise
During our conversation with CA Ankush Bhutra, Financial Controller at Blume Ventures, an India-based early-stage VC firm that has raised over $290M for Fund IV, he said that sector and business expertise are crucial when joining a VC firm.
Here is why…
Domain expertise:
- In addition to a CA qualification or other financial degrees, VC firms are now looking for domain or sector expertise, as well as business expertise.
- This is because the combination of these skills can be very valuable in evaluating investment opportunities.
- For example, if you have domain expertise in the software-as-a-service (SaaS) industry, you would be able to identify the founders that have the skills and experience to succeed in this sector.
- You will also be able to assess whether the founder is approaching a problem in the right way.
As a CA, you can become indispensable by adding domain expertise to your financial, auditing, and tax skills. This will make you industry agnostic and allow you to evaluate investment opportunities in any sector.
Business expertise:
- In today’s investment industry, people are not hired as generic investment professionals.
- For example, if you are a CA and have worked in a strategy role in a company like ITC or Proctor & Gamble, you would have a good understanding of the business and the distribution network.
- This makes you a good fit for a venture capital or private equity fund that invests in consumer businesses.
2. Excellent Communication Skills
In the investment industry, communication skills are even more important.
You will need to be able to communicate effectively with a variety of stakeholders, including investors, portfolio managers, and analysts. You will also need to be able to communicate complex financial concepts in a clear and concise way.
That is why, there will be a serious gap if you cannot articulate your ideas clearly, even if you have a deep understanding of the technical aspects of a subject.
If you want to be successful in the investment industry, you need to develop strong communication skills. This will help you build relationships, make decisions, and achieve your goals.
3. MBA degree
“An MBA from a top business school can help people develop the skills they need to analyze and evaluate businesses, in my opinion,” says Ankush.
He goes on to say that, due to the kind of practical training they undergo, they may be an easier fit to move from the Finance team to the Investment team of a VC firm.
4. Investment Banking Experience
To get more insights into the topic, and understand what methods work when it comes to joining the investment side of a VC, we spoke to Vineet Agarwal, an investor at Antler, an early-stage Venture Capital firm.
The entrepreneurial mindset was ingrained in his mind from a young age, due to his family background.
He completed his MBA in 2017 and started as an Investment Banking Analyst at Goldman Sachs.
“I spent a significant amount of time, working and gathering diverse experiences across London, New York, and Sweden. The projects mostly revolved around advising clients on a variety of M&A transactions, more specifically large enterprises.”
Vineet recalls that his background in investment banking at Goldman Sachs played a vital role in his transition to the venture capital field.
Additionally, his global exposure in locations like London, New York, and Sweden broadened his perspective and understanding of diverse business environments.
5. Experience working in Startups
This is one of the effective ways to prepare yourself for the investment team of a venture capital firm.
Having acquired an MBA degree and investment banking experience, in 2019, Vineet started to closely observe the Indian Startup Ecosystem. He was extremely bullish on the Indian market.
Eventually, he joined Ola, an Indian multinational ridesharing company, in their Corporate Development team. It was a startup back then.
“My learnings at Ola were terrific. I worked on fundraising, investments, mergers & acquisition, and strategy. I have been actively involved in multiple fundraisers across Ola, Ola Electric, and Ola Financial Services,” said Vineet.
In 2021 he happened to see a LinkedIn post from Rajiv Srivatsa, Partner at Antler, a global venture capital firm, inspiring hundreds of startups and thousands of entrepreneurs across six continents.
Antler was building the core team in India and it was an opportunity to not just lead India investments, but also be at the core of building something new and unique from the ground up.
Vineet took the opportunity.
He says that when it comes to hiring for the investment team at any VC firm,
- Business acumen across one or more sectors,
- Strong understanding of numbers,
- Founder empathy
- Speed of decision-making and execution are must-haves
Vineet says that working in fundraising, investments, mergers & acquisitions, and strategy in Ola certainly opened doors and helped him get his preferred role in the VC.
Ankush also believes that building a robust knowledge of startup ecosystems will help you identify potential investment opportunities and evaluate their growth potential.
6. Lastly, there is no one formula that works
During our conversation with CA Aashish Vanigota, Venture Capitalist at IvyCap Ventures, a $500M AUM fund, he mentioned how he paved his path into the investment team of a VC firm.
In 2017, he was offered an internship at a private equity fund, named Carpediem Capital Partners – a domestic early-to-mid market PE fund, focused on early-stage investing across consumer-tech and B2B managed services.
He opted to get out of the Investment Banking role at Yes Bank, a well-recognized bank in India, for that internship opportunity. Ashish was with Carpediem for 4 years where he grew from an Intern to an Analyst and Associate (He was a part of the core investment team).
Eventually, he moved to FOSUN RZ Capital (a leading global VC fund with an AUM of $1.3B) as an Investment Manager. He was part of the core investment team.
That one decision of taking an internship and going for what he believed in paid off!
Additionally, Ankush noticed that many people that are currently part of the investment team initially started off in the transactions team of a VC/PE. This is because the transactions team is responsible for sourcing, evaluating, and executing investment opportunities.
To sum it all up, there is no one straight path that can get you into a VC firm, especially in the Investment Team.
But a combination of different strategies, a passion for the VC industry, and sometimes, luck certainly would get your foot in the door.
FAQ
1. What is a VC Firm
A VC firm, or venture capital firm, is a type of financial institution that provides funding to early-stage or startup companies in exchange for equity or ownership stakes. VC firms typically invest in high-potential, high-growth businesses with the expectation of significant returns on their investments.
2. What does the investment side of a VC firm do?
The investment side of a VC firm is responsible for the process of sourcing, evaluating, and making investment decisions in potential startup companies. This team focuses on identifying promising investment opportunities and determining whether they align with the firm’s investment thesis and strategy.
