Venture Capital Uppers and Downers
Published: Mar 10, 2009
You may think you want to work in VC, but make sure you know both the good and bad of it. Vault takes a look at VC uppers and downers.
Venture Capital uppers
- You often get to be the one making decisions because you have money. .
- Over the long term, you will certainly become rich because the job is well paying and you should eventually get "carry" or equity in the firm. .
- Being "in the middle of it all" in some of the most interesting industries. .
- You have access to the best minds -the people you work with are typically very smart and interesting.
- Your job is to absorb and enjoy the positive creative energy of entrepreneurs and direct it toward successful execution. .
- You could suddenly become rich if one of your companies does extremely well and you were able to co-invest or you have carry. .
- You have access to the best information systems.
Venture Capital downersHere is a list of some of the negatives we hear from people who have worked in the industry for a while.
- You don't have pride of ownership in anything. You're just an investor, not a builder.
- VC is a slow path to wealth compared with the immediate cash income you get in investment banking, hedge funds or even management consulting. .
- You are a jack-of-all-trades, not an expert. After a few years, you can't do anything other than VC because you grow spoiled by making decisions without much compromise. .
- Venture capital is fundamentally a negative process. Because you reject 99 of every 100 plans, year after year, over time you focus on figuring out what is wrong with a company so you can reject it and get onto the next deal. What is wrong with the management? The technology? The deal terms? The strategy? After just a few years, that mentality may bleed into your life. What is wrong with my partners? What is wrong with my spouse? What is wrong with me? Oh, the angst! .
- Because you reject 99 of every 100 entrepreneurs, you make a lot of enemies, no matter how nice and helpful you try to be. No one likes rejection, and passionate entrepreneurs have long memories.
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