PitchBook’s Friday 5: How to Get Started in Venture Capital
October 18, 2013
Ready to get started learning about the venture capital industry?
I’m doing something a little different with this week’s Friday 5.
At PitchBook Data, we pride ourselves in onboarding our employees with a unique, thorough industry training process. This training is extremely important, because few people come in to the company with prior venture capital or private equity experience. (One disclaimer: Our average employee age is 27. We’re very proud to be a young, bust-your-butt company, and this youthful dynamic naturally means fewer of us have previous industry experience.)
This week’s Friday 5 highlights some efficient, proven ways to start learning about the VC space. Whether you’re a college undergrad exploring first-job possibilities or an experienced professional with years of different financial expertise under your belt, there are sure to be some useful tips for you.
The core concept here is lots of reading, but I do promise that what you’re reading is going to be a lot more fun than any textbook!
1. Venture capital news One of the very first things PitchBook employees do is sign up for daily venture capital newsletters. The first few days of news sifting can be a little overwhelming—there can be anywhere from 10-20 different venture financings in a given day—so it’s important to realize that you realistically can’t keep up with every single deal that is going on in the space. And deals aren’t the only important thing to keep track of, with investors, fundraising and management moves always hot topics of discussion in the VC space.
The Term Sheet — To say that PitchBook adores Dan Primack would be an understatement. Primack is often the first to report newsworthy venture funding and trends, and always has an articulate, forward-thinking perspective on happenings in both the private equity and venture capital spaces. How does he do it? We don’t know, but we do look forward to the Term Sheet every morning like our first cup of Seattle coffee.
PitchBook’s Venture Capital Newsletter — We have almost 200,000 subscribers to our daily VC & PE newsletters, and our awesome financial writers never fail to inject tasteful wit and humor into their daily news summaries.Get a taste of our writing style in some blog posts by our VC specialist George Gaprindashvili and our PE specialist Alex Lykken here.
Incubators, dry powder, limited partners, angel investors—it’s a whole new world of words, and what do they mean? Simply studying up on terms can make it feel like you’re still in school, and it’s better to learn the concepts and their relationships in the context of a story you’re reading. For example, let’s say you read the phrase “median pre-money valuation” in a story about Twitter’s impending IPO. Google is your best friend here, as well as resources like PitchBook’s private equity and venture capital glossary.
By people, I mean Twitter. Reporters, venture capitalists and even venture firms are increasingly active in the “Twittersphere,” and will often tweet breaking news or spar on industry issues in a transparent way that’s never been accessible outside of a venture firm’s conference room. Getting aware and active on this social platform can have huge returns because there’s nowhere else you can interact with the best in the business on a daily basis. It’s hard to narrow down a concise list of must-follows, but here are some to get you started:
Reporters: @DanPrimack of Fortune, @DeborahGage of the WSJ, @SarahCuda of PandoDaily and @KaraSwisher of AllThingsD. There are also many specialized, regionally focused VC reporters to follow, like @ErinGriffith of PandoDaily New York, and industry experts, like PitchBook’s director of research, @adleyb.
VCs, listed by firm and associated star investor: @500Startups @DaveMcClure, @Benchmark @BGurley, @a16z @CDixon, @FoundryGroup @BFeld, and @usv @FredWilson.
4. VC blogs
Some of the best industry perspectives comes from VCs occasionally chiming in on their own blogs. There are a couple repeats from the Twitter list above.
One of the best ways to learn the lifecycle of a (successful or non-successful) venture investment is to track a company through its series of financings. Unfortunately, with such high failure rates after angel/seed investments and a lifecycle for many venture funds reaching the 10-year horizon, a particular company’s lifetime as a venture-backed company can be hard to follow.
Fortunately, with the venture capital industry becoming increasingly transparent, these resources are more readily at your disposal. For example, check out daily deals startup Zulily’s financing history in this VC infographic.
This article is meant as a starting point for you to learn more about the fast-paced venture capital industry. Explore thePitchBook Blog for more articles and resources.