What should I do if I want to be a partner at a venture capital fund in 7 years?
There seem to be 3 primary paths, although many stories. There’s really no “path” … you see so many backgrounds there … but … to the extent there is a more common background … then …
1-/ Be a non-partner and just totally beat the odds, source amazing deals, and just kill it. But this is harder than you’d think. The problem here is in most firms, it can be very hard to get deals done. Focus on trying to find an amazing mentor that would let you run here. But … this is very hard b/c VC firms for the most part are not in the business of creating the next generation. Very, very few associates ever get promoted to partner because there is no promotion track. Especially in B2C, and in Huge Firms — associates are simply seen as a raw sourcing engine, undervalued, with “picking” and “closing” as what’s valued. Hard to get promoted there, even if you sourced Pinterest, Facebook, whatever.
In SaaS, see, e.g., Mamoon Hamid of Social+, who’s track record is A+ and whose first deal out of the gate was Box.
2-/ Be a Successful VP at a Portfolio Co. or Very Hot Tech Co. Known to Partners. When it comes time to recruit a new partner — which is rare — looking at superstars in the portfolio isn’t uncommon. Or outside of the portfolio, but in a similar relationship. Usually, the company has to be a real Unicorn and a hot company — e.g., Twitter, Facebook, etc.
In SaaS, see, e.g.. Ilya Fushman who just joined Index as a GP from being very early VP and senior management at DropBox.
3-/ Be a Super Successful Angel. You can do this on the side. But you really have to repeatedly kill it. ‘Cause Angel does not equal VC. Sneaking $25k into a deal it turns out isn’t the same as investing $3m into a deal with institutional capital, it turns out.
…. ok then there are 2 other paths that work, but are different …
4-/ Be a Successful Founder/CEO. This works. If you are founder CEO of a successful company in a hot space and seen as a leader — some VC firm will absolutely want you. Sold your venture-backed company for $800, and are very charismatic in a hot and trending space? You’ll be recruited to be a GP, no doubt.
The problem is — Why Bother? It’s hard to make more money as a VC than a founder-CEO (unless you are a senior parter at Sequoia, etc), and … you’re no longer the boss. And you’ll probably want to do another CEO gig, anyway.
>> So the irony is that the highest-odds track in the end is the least appealing.
And these days …
5- / Raise your own fund. This used to be borderline impossible, but now if you can do 3-/ or 4-/ well, you may be able to raise your own fund in 7 years. There is 100x the demand than LPs to fund new venture firms. So odds are low here. But it’s not impossible if you are a killer angel in particular, and sometimes, a killer founder with a killer network.
The problem with 5-/ is with a small fund — and your first fund always will be relatively small — that unless you do an Uber, they often aren’t that lucrative — and you have to wait 10-14 years to get “carry”, or profits.
To do this –you gotta really love the job. And commit for 14+ years.