What actually makes venture so hard to break into?

Hi! I’m glad you’re here. You’ve made it to issue #26 of VC Demystified🪄.

My name’s Nicole - I’m a Principal at an early stage venture fund, and I know firsthand that VC can often be a black box. Breaking into the industry may feel daunting and resources can seem scarce and inaccessible. I wanted to put together a newsletter to give others the playbook I wish I had when I first started.

So many good things happen when you are in the right place at the right time. Most things in life, both personal and professional, are a mix of hard work, timing and luck. When you think about venture investing and VC recruiting this is true as well. As a founder, you can have the right idea at the wrong time (e.g. Vine) and as an aspiring VC, you can have the right skill set in a bad hiring market. The good thing though is that with consistency and hard work you can maximize your surface area of getting the timing right. Just keep going!

Today’s deep dive: The real reasons VC is so challenging to break into

My personal mission is to open as many doors as possible for other people and this newsletter is just one avenue to do that. As always, I will continue to post VC insights daily across my socials for those of you who prefer those channels.

The real reasons VC is so challenging to break into

Everyone talks about how VC is one of the toughest industries to break into, but most people don’t understand why that is the case.

Unlike more traditional career paths, VC has a unique set of hurdles when it comes to hiring.

If you're an aspiring VC, you need to know these nuances to better your odds of landing your dream role.

In this post, I’ll take you through 7 reasons why breaking into VC can be more challenging than other career paths.

Once you know these, you can navigate them.

Let’s get into it!

1. Limited Number of Positions

• Small Teams: Most VC firms have small teams, often with fewer than 20 employees. Many firms may only have a handful of partners and a few junior positions. As a result, there are far fewer openings compared to industries like investment banking or consulting.

• Management Fee Constraints: VCs keep the lights on and pay employees with management fees, which is usually 2% of their fund size or their assets under management (AUM). Because most VC funds are smaller, especially at the early stages, many VCs don’t have enough capital to hire large teams. Learn more about how VCs pay employees here.

2. Preference for Experience

• Founders and Operators: Many VC firms like candidates who have startup experience, either as founders or senior operators. This experience provides a valuable perspective on what it takes to build and scale a company, which is helpful when evaluating startups.

• Previous Investing Experience: Firms often favor candidates who already have investing experience as well, such as those who have worked in private equity, investment banking, or another VC firm. This creates a catch-22 where you need experience to get experience. Learn about the 3 ways you can gain VC experience before breaking in here.

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