When I announced to friends that I would be spending my summer working for a venture capital firm, they seemed surprised. The role didn’t match the liberal thinking that I usually live by. But I was the first one to realize that I did not appreciate the full scope and breadth of venture capital activities. Indeed, when I first contacted Haas alumna Kira Noodleman to understand what a venture capitalist investor does, it was her obvious passion for her work that got me more and more intrigued by the startups and VC value chain. Embracing my full-time internship this past summer at Bee Partners as a summer associate, I realized the diversity of thoughts and missions that VCs can hold, and that managing a venture capital firm is much more than investing in cool companies and improving your profile on the market. Being a venture capitalist is about self-assessing, doing due diligence, and supporting your portfolio companies. Venture capital is not about making quick money; it is about a long-term commitment and an engagement in ideas that you think worthwhile.
A few key takeaways from my time at Bee.
Continuously self-assess. What impressed me this summer was the constant self-reflection and critique that everyone on the team engages in, along with the constructive feedback exchanged weekly and throughout the year during workshops and sprints. I had the chance to participate in a positioning workshop which triggered passionate discussions about the fund’s objectives, organization, and strategy, and where everyone pushed back and was listened to and challenged. As a startup itself, Bee grows, evolves, and matures, yet never takes success for granted nor rests on its laurels. This mindset pushes the team to explore new areas of investment beyond their current knowledge base. One of my biggest tasks this summer was to write investment recommendations in the health care sector. Despite a strong education and 7 years working in the biotech and health care sectors prior to starting my MBA, my self-assessment revealed that my knowledge of the U.S. healthcare system was limited to FDA and regulatory affairs as applied to big corporations. I knew little about health care startups. Working at Bee, I had the opportunity to attend more than 20 events in the field, from coast to coast. I met researchers, faculty, and startup Founders, and felt the amazing energy and innovation that emanate from the Bay Area.
Diligence is due, not optional. More importantly, diligence does not only cover the companies we want to invest in; it includes all the people we seeded in the past and potential investment areas going forward. It’s about networking and finding the partners who will later support the Founders. It’s about finding new limited partners to raise a future fund. It’s about finding future market disruptors and making them allies rather than enemies. This summer I was able to apply my extensive science and engineering background to the due diligence process while developing new networks and networking skills.
Know what you are looking for. Venture capital is a long-term game. It is not only a one-time check to promising Founders; it is building a relationship for years and years and years. It involves maintaining a philosophy in a segment you understand and in which you can support your Founders as well as adapting to new tech (r)evolutions, management practices, and legal or geographic opportunities. I had the opportunity (yes, the opportunity) to screen more than 500 startups this summer, and to reply to every single one of them. Believe me, this meant saying “no” a lot. Although most Founders are passionate about their ideas and have well-thought-out plans, a disciplined investor has to be able to say “no” often in order to say “yes” to companies that match their objectives, knowledge, and abilities. In such a competitive environment, with relatively low barriers to entry and where dozens of VCs emerge each year, specialization and domain knowledge are key to a VC firm’s success. Because when you know what to invest in, you are better able to support your portfolio companies with the resources they need, meaning the survivorship of your portfolio is the survivorship of your fund, too.
Be a great partner for your limited partners and your Founders. This summer, I learned that the most challenging and interesting part of the business is serving as the mediator between your investors and your investments. You need to understand and serve them both, and your objective as a firm is to bring this win-win-win situation to life. Of course, it’s harder in real life than on paper. I got first-hand experience with this balance by drafting an investor deck intended for LPs and writing a report about compensation allocation trends for our Founders. The report was written after we surveyed our portfolio companies and was meant to provide them cues about both the amount of equity and salaries in cash that Founders and different employees receive from the inception of a company to a series B.
I was glad to work in a young fund and experience both a startup and a VC environment this summer. I am grateful to have worked closely with Garrett Goldberg, Tim Smith, Kira Noodleman, and Michael Berolzheimer, who supported me while allowing me a degree of freedom in decision making which I didn’t expect, coming, as I did, from a different field and a different culture.
After this summer, becoming a VC is more appealing than ever. Of course, investing in and working with talented entrepreneurs who want to change the world while being financially successful seem compelling. And as I drove across the country after my internship and experienced the breadth of American history, I realize that this country has a unique mindset, which runs in parallel to startup Founders and, even more specifically, to Silicon Valley. Like the Forty-Niners who ventured farther and deeper into new country, into new rivers, and in colder waters in search of the precious stone, there is a large amount of hard work and luck involved in VC. But the smartest and hardest working adventurers learn how to position themselves to strike gold.