As one of our contacts at one prestigious B-school put it: "Everyone wants to do Venture Capital these days-it's a freakin' nightmare." It's the freakin' truth -- Venture Capital is to today's b-school students what Wall Street was to their counterparts in the 'Big 80s.' VC, as it's known, is just sexier than brand management or consulting. Who wants to market lunchbox snacks or reengineer filing systems when they can be building the next Netscape, Microsoft or Yahoo!? Part of the attraction is the diverse nature of the job-venture capitalists evaluate companies and business plans, create strategies, make deals, and recruit the executives to head the businesses they fund. They also sit on boards and advise those companies. They live and die by their Rolodexes, and must learn how to build and work a network (or perish trying).
Unfortunately, there's not enough space on the bandwagon for all the prospective venture capitalists out there. Historically, the people who have gotten into the business have been seasoned executives looking for a career change or MBAs with several years of experience and a deep knowledge of a specific industry. But in the past five years, MBA grads have had the chance to start their careers in the industry. Established VCs have been looking for younger talent to fill their ranks and learn the business from the inside. But the only way to get a job in the business is through contacts. An estimated 70 percent of all venture capitalists are HBS grads, "and almost all the rest are from Stanford," remarked one industry insider. So "if you're not from one of those schools, you've got to have some concrete experience-preferably in a startup." Without experience, your chances of getting into the industry are virtually nil "unless you can prove that you know what's going on in hot industries and you're really good at seeing market trends," says one source. "You learn all the basics in b-school," he adds, "but nothing can replace actual operating experience."
The entire VC industry depends a great deal on networking, charisma and luck - and the same holds true for getting hired there. The most important step is "network, network, network," say industry insiders, who also urge aspirants to do their research in order to discern which types of candidates each firm prefers. This is confounded, of course, by the fact that most firms keep an extremely low profile. Even Harvard professors advise their MBA students not to count on getting a job in VC right away. According to the Boston Business Journal, a qualified Harvard MBA has a 50 to 1 chance of getting a job in VC straight out of school (In 1995, less than 20 HBS grads landed VC jobs; close to 40 were hired in 1996). In Boston alone, the number of jobs at VC firms has been increasing by about 8 percent each year, while the number of resumes they receive has been increasing by about 25 percent.
One helpful option for aspiring venture capitalists is to apply for a Kaufman Fellowship. Launched in 1995 by the Kaufman Foundation, the program pays 12 MBAs an annual salary of $80,000 while they work at a VC firm for two years. After going through the program, Kaufman fellows are shoo-ins for full-time positions in the market.
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