Post-MBA Career Goals: Venture Capital

So you want to get into Venture Capital after your MBA.

32% of MBA graduates enter the finance industry, according to this 2023 GMAC Corporate Recruiter’s Survey. For buy-side industry job acceptances in finance, like investment management, private equity, and venture capital, M7 schools take the lead. 31% of the class of 2022 MBA graduates at Stanford GSB, 30% at HBS, and 24% at Wharton accepted buy-side job offers.

Vibhav Parikh spent much of his career working at NAFA Capital Group, an investment management and financial services platform in Mumbai, overseeing the entire deal cycle from origination until portfolio management. After working with a portfolio company in Dubai, he realized he wanted to explore a more international side of Venture Capital. He reached out to Sam in 2021 to apply to MBA programs that would give him global exposure and connect him with a diverse network. Now, he’s chasing his VC dreams at INSEAD’s Fontainebleau campus in France.

Vibhav sat down with us to share his insight into Venture Capital as a post-MBA career. Watch the full YouTube interview here.

Why is VC an attractive post-MBA career?

Compared to other finance roles like investment banking or auditing, for example, where one would be involved in a niche part of a deal, venture capital involves a lot of generalist expertise.

Venture capitalists are involved in executing a deal from start to end. This means that they require a lot of different skills to work in a largely unstructured space where their role depends on the deal flow.

Broadly, venture capitalists work on:

Sourcing: Getting a good deal is the most important first step. For example, there may be someone in your personal MBA network that you have a relationship with. They have a strong entrepreneurial background and plan to start another business after their MBA, but haven’t marketed yet. As a venture capitalist, you will pitch them to a potential employer and demonstrate how this fits within your venture capital investment thesis and ticket size. You will also map it to your ideal investment philosophy and sector.

This is one example of how you would source an attractive potential investment for an employer. Other ways of sourcing deals could be through data-driven processes or networking events.

Screening: Following sourcing, you will need to do due diligence. This involves a rigorous screening process of the company, depending on what stage and cycle it is at and which industry it operates in. This investment recommendation is then pitched to the investment committee.

Investing: Next, the VC fund invests in the company. This kickstarts the next set of processes which involve legal diligence, legal execution work, followed by portfolio management in all its stages.

How do VC firms recruit?

VC firm recruitment is entirely different from other buy-side industries like investment banking.

VCs have smaller teams and could either recruit for particular expertise in the sector that the fund invests in, or for a more generalist skill set, from people management to excel modeling.

For example, one of Vibhav’s peers in the INSEAD MBA program is a physicist who transitioned to a VC role. He interned with a fund that invests in tech, which requires his particular area of expertise in physics. For Vibhav, who has no tech experience, this would not be a viable role.

So when it comes to recruiting for VC roles, you should align your skills with the specific fund you are recruiting for and the portfolios they invest in.

But Vibhav warns that VC recruiting is no easy feat. VC recruiting is an unstructured process all over the world. For other industries, recruiters may reserve spots for business schools that have a healthy recruiter pipeline. But this isn’t the case for VC.

VC funds usually hire at first for long-term internships. During your internship, they want to see your research and networking skills - something you can only showcase by connecting them with companies and startups they can potentially invest in. You will also need to understand what the fund manager is looking for by researching their social media and network.

Overall, VC recruiting is heavily influenced by your own initiative and network, and it helps to already have a foot in the door.

What skills do VC firms look for in MBA candidates?

VC is a very people-oriented business. You have to maintain relations with your investments and the founders of those companies.

For example, there may be start-ups that raise large amounts of money in a Series A funding round. As a VC fund, you now have to demonstrate what you bring to the table for this company and that you are a good fit for them.

This involves building a relationship with the founder and showcasing the network you have. You will need to speak to people across industries and sectors in conferences, informal chats, and networking events to understand information that may not be publicly available.

For example, if you’re considering investing in a start-up in deep tech or AI, you would want to understand the valuation multiple to determine how to price the investment. To get this information, you will need to speak to a fund partner in another VC who worked on a similar deal previously, and ask them what multiple they gave that company.

This means that you need to cultivate strong networking and people management skills to become seriously involved in the VC space. Many of the skills you will need in VC are more interpersonal than technical in nature.

Are VC firms recruiting right now?

With interest rates going up, VC recruiting is currently slow. But there remains a focus on seed and Series A/pre-Series A funds, which are continuing to invest.

But for a lot of later stage funds, VC funds are pausing right now and not recruiting. Compared to a year ago, the frequency of their investments is much lower.

For MBA candidates, it’s important to speak to funds and get a feel for who’s recruiting and in which areas. When it comes to VC, there are many applicants and only a select few seats, so it’s important to differentiate yourself as a serious candidate even outside your MBA.

Funds will be much more receptive to interview you if you can go beyond your MBA to show that you’re well-researched and have investment recommendations, a solid network, and the right skill set.

How does the INSEAD MBA prepare you for VC?

At INSEAD, compulsory core classes in P1 and P2 (the first 2 periods of the MBA program) focus on developing hard MBA skills, like finance and valuation. For Vibhav, who already had a Chartered Financial Analyst (CFA) certification, these were mostly about refreshing his existing knowledge. In P3, electives focus on closing any previous knowledge gaps and specializing in a field, like finance, for those who are keen to enter a specific role after their MBA.

As for the soft skills required for a VC role, Vibhav notes that INSEAD offers several electives that take unique approaches to soft skill development. Courses on making authentic decisions, psychological issues, and people management were topics he had not previously considered, but are useful in the VC space.

Additionally, being on the field and interacting with VCs, founders, start-ups, colleagues from different countries, and professionals in INSEAD’s VC & PE Club has helped him polish these soft skills.

Advice for MBA candidates

For MBA candidates who are looking to get into VC after their MBA, Vibhav advises to use the time between your offer and the start of the course intelligently.

First, take up a pre-MBA internship. It may be unpaid, but it will help you understand the market and get on-ground experience of the industry.

You will also need to network extensively. Start by looking at potential start-ups on LinkedIn, for example, and explore the VCs you find interesting. Once you’ve made progress in your start-up research, make a list of these VCs and their Assets Under Management (AUMs) and start interacting with them. This will take a lot of time and effort, but you’ll start your MBA on a much better footing than most other candidates.

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