If you are up to date with your venture capital news, you have definitely heard the term venture capitalist being thrown around. So, who’s a venture capitalist really?
A venture capitalist is an investor that supports a young company in the process of expanding or provides the capital needed for a startup venture. Venture capitalists bet on the potential return on investment which can be rather sizable if the company is successful.
It goes without saying that not all startups become successful. In fact, about 90% of startups fail so investing in startups is pretty risky.
What You Need
Here are a couple of things to ask yourself before dipping your toes into the world of startup investments.
Do you have experience working for a reputable firm in investment banking, technology or a startup? Do you have an MBA and where is it from? Do you have a strong social media experience? Especially on Linkedin. Do you have expertise in technology that people come to you for answers about said technology? Do you have a successful investment history? Do you keep up with venture capital news?
If your answers to these questions are positive, you just may have a future in the venture capital world.
A Day in the Life of a Venture Capitalist
Here is just a sneak peek of what your new life would be like;
Starting the Day
Most professionals in the industry start their day by keeping up with venture capital news – usually by reading respected publications and websites. The main focus is on publications that offer information on potential leads for investments on startups.
Venture capitalists who specialize in one industry focus their attention on specific sites and journals that they have subscribed to. Whatever you gather may be completely redundant the next day but it will definitely be helpful in the future.
The rest of the morning is filled with meetings and phone calls. Meetings are with colleagues like venture capital investor relations specialists and partners of the firm to discuss the day’s focus. Venture capital investor relations specialists are experts in communication and public relations and their job description is managing relationships.
More often than not, contacts working in the same fields as potential investment opportunities sit in on meetings like those and contribute to the discussions which helps venture capitalists to gain more insight and decide whether to pursue some investment or not.
Venture capitalists stay connected with current portfolio companies on a regular basis, which is absolutely essential in determining just how smoothly a company is running and if your funds as a venture capitalist are being maximized. It’s good courtesy to take members of the company out to lunch to mull these details over a meal.
Regardless of where the meeting takes place, the venture capitalist ought to evaluate the company and potential use of the firm’s investment. They take notes and progress reports to be shared later with other partners in the firm to decide if the startup should be further supported or cut off.
Venture capitalists don’t typically have an 8-hour day so evening comes whenever the afternoon dealings are concluded.
Evenings could involve dinner meetings with prospective entrepreneurs seeking financial support from the firm to support their ventures.
During this meeting, a venture capitalist can get a sense of the company’s potential for success, how dedicated to success the entrepreneurs are and whether follow up meetings are needed.
The venture capitalist makes venture capital presentations about the company along with due diligence reports. These venture capital presentations are shared with the firm the following day so a decision can be made on whether or not to support the entrepreneurs.