Erik Torenberg
@eriktorenberg 1 year, 10 months ago 1675 views

1/ Someone emailed me asking how to break into VC, so I wanted to answer on Twitter where others could see and contribute to the conversation.

2/ “Being a VC” can mean a lot of different things, so it’s worth asking:

What actual activities do you want to do?

- Deep market analysis?
- Be in the flow of information and people?
- Make deals?
- Work closely w/ founders over time (e.g take board seats?)
- Manage capital?
3/ It’s worth specifying what type of VC you might like to become — as there are different archetypes. E.g.

- Benchmark (Lead series A/B - couple investments a year)
- First Round (Lead seed rounds, partner w/ a few companies a year)
- SV Angel (Make lots of seed investments)
4/ Continued:

Expa - Incubate companies

YC / Village Global - Build a platform to help entrepreneurs at scale

Do you want to join a firm or start one? There’s a lot to consider.

Different paths will require different skillsets & sets of experiences.
5/ Since the person who wrote the email is a young person trying to break into VC by joining a firm (and who doesn’t want to start a company), I’ll tailor this tweet storm to that goal. There’s some overlap.
6/ If you are looking to join a VC firm, the question the firm needs to be able to answer is:

“Is this person going to help me to invest in companies that I otherwise would not have invested in without him/her?”

How do you do this?
7/ Basically you want to see yourself as having an asset or “portfolio” of assets that make you uniquely valuable—not only next to thousands of other smart, connected, well-branded ppl trying to break into VC—but also to other *existing* angels/VCs.

Why will you see great deals?
8/ Maybe because you own a key network. Examples:

- You worked at Stripe or Palantir and run their alumni group (Company)

- You went to MIT and ran their on campus fund (College)

- You ran Waterloo’s startup community and you know all the great projects (Location)
9/ More examples of key networks:

- You host the signature AR/VR conference (Vertical network)

- You run a community like "Interact"—top technologists under 25 (Horizontal network)

- You’re the best writer in, say, crypto—or more specifically, privacy coins (Legible expertise)
10/ Or you have some unfair advantage:

- You worked at Product Hunt or in journalism (can help startups with distribution/PR)

- You host "The 20 min VC" (can help startups raise money)

- You run a podcast called "The 20 min Blockchain Engineer" (can help startups recruit)
11/ The important thing is to do the work upfront.

Here are other things you can do to add value to VC firms:

1. Send them good deals
2. Send their companies customers or talent
3. Invite partners on your podcast or to your event (or any of the assets mentioned above)
12/ These things, of course, are hard.

How do you get access to customers in the first place? Host a VP of Sales Event once a quarter, or an event for another core buying audience.

Talent? Start a job board site for engineers, or a regular happy hour for top designers.
13/ Deal flow? Have some asset that makes founders come to you — an event series, a valuable network, or a domain expertise — and then send deals to others. The more you send good deals the more you’ll receive.
14/ Quoth Rob Go: “ it’s much less about “how” to find a VC job but more about “being” the kind of person who can get a VC job.”
15/ Getting a job in venture capital is partly less about “who you know” and more about “who you’ve helped.”

Start creating a personal portfolio of projects that allow you to help others, especially around getting into deals, and you may break into VC.

Add any other thoughts.

More from Erik Torenberg

1/“What would need to be true for you to….X”

Why is this the most powerful question you can ask when attempting to reach an agreement with another human being or organization?

A thread, co-written by @deanmbrody:

2/ First, “X” could be lots of things. Examples: What would need to be true for you to

- “Feel it's in our best interest for me to be CMO"
- “Feel that we’re in a good place as a company”
- “Feel that we’re on the same page”
- “Feel that we both got what we wanted from this deal

3/ Normally, we aren’t that direct. Example from startup/VC land:

Founders leave VC meetings thinking that every VC will invest, but they rarely do.

Worse over, the founders don’t know what they need to do in order to be fundable.

4/ So why should you ask the magic Q?

To get clarity.

You want to know where you stand, and what it takes to get what you want in a way that also gets them what they want.

It also holds them (mentally) accountable once the thing they need becomes true.

5/ Staying in the context of soliciting investors, the question is “what would need to be true for you to want to invest (or partner with us on this journey, etc)?”

Multiple responses to this question are likely to deliver a positive result.
1/ Here’s a list of conversational frameworks I’ve picked up that have been helpful.

Please add your own.

2/ The Magic Question: "What would need to be true for you

3/ On evaluating where someone’s head is at regarding a topic they are being wishy-washy about or delaying.

“Gun to the head—what would you decide now?”

“Fast forward 6 months after your sabbatical--how would you decide: what criteria is most important to you?”

4/ Other Q’s re: decisions:

“Putting aside a list of pros/cons, what’s the *one* reason you’re doing this?” “Why is that the most important reason?”

“What’s end-game here?”

“What does success look like in a world where you pick that path?”

5/ When listening, after empathizing, and wanting to help them make their own decisions without imposing your world view:

“What would the best version of yourself do”?

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