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Why I Became a Venture Capitalist
This post could also be titled “What the heck am I going to do with my life?”
I have quite a few folks who follow my blog who are students or are relatively early in their careers (as am I).
A big question that I often wrestled with when I was in Business School is one of vocation. What do I want to do with my life? What is my professional calling? More practically – how do I find a good intersection between what I want to do (the work), what I want to enjoy (time, family, hobbies, money, non-work relationships, etc), and what I hope to contribute to the world?
Choosing the path of becoming an investor was not obvious me. I was actually intending to start a company or join a startup. I saw myself as a builder more than an investor. But as I contemplated the various options before me, I came up with what I think is a very effective process for thinking through major career decisions. It consists of three very simple questions and I hope it’s helpful for you.
1. What Activities Do I Enjoy Most?
Note, this is focused on ACTIVITIES, not jobs. Do you like writing? Public speaking? Debating with a small group? Doing analysis or coding? This can be stuff you enjoy at work, but also stuff you do during your free time.
I try to get to the bottom of this when I meet with entrepreneurs as well. My colleagues at NextView and I all find that founders tend to do best when their ideas and their roles are authentic.
My old boss, who himself is now a seed-stage investor, often asks a similar question of entrepreneurs: “Tell me about a time you were happiest at work”.
The goal is to find a job that allows you to spend as much time as possible doing activities that you enjoy.
For me, I most enjoy meeting 1:1 or in small groups to try to get to know people and to try to help them solve problems they care about. I am happiest at work when I’ve done this, and it’s also one of the ways I love spending my time outside of work.
Until I thought of careers through this lens, I never realized that this is pretty much what a VC does all day long. You meet with entrepreneurs who are trying to raise money, you meet with early stage teams that you have invested in, and you meet with a small team of partners to try to figure out how to do the first two better. I can attest that it’s awesome to do a job where the activities map so well to what you enjoy doing.
Note, there are things I don’t get to do that I also enjoy. No job is perfect. I don’t really get to build anything myself (maybe that’s part of the reason I’m excited to be building NextView). I don’t get to lead and develop large teams. I don’t get to see the direct impact of my work the same way as I did when I was involved in launching product. I also don’t get to teach students, which is something I would like to do at some point in my career.
2. What Domains Do I Find Intellectually Stimulating or Personally Fulfilling?
Most people start here before doing #1. That’s a mistake. I think #1 is far more important.
Everyone thinks about the domain that they are interested in, so I won’t spend much time on this. I just want to make two points. First, I think it’s important to make a choice and go deep in something relatively early in one’s career. A lot of successful young folks in the business world step into roles like consulting or banking and don’t want to choose a domain because they want to keep their options open. Even when it’s clear that there is a preference for media, or education, or something similar, it’s sometimes scary to make a choice and plunge into something specific. Especially if it means a pay cut.
My second thought is that domains evolve. It’s not a lifelong decision, and careers pivot continuously. So don’t take this so seriously. Just do a job with activities you enjoy in a domain you find intellectually stimulating or personally fulfilling.
For me, it was an iterative process. I first decided that I loved consumer services. So when I was a management consultant, I moved into a group that focused specifically on this area for a Private Equity client that invests exclusively in retail and consumer. But then I got interested in how consumer services were being transformed by the internet, and fell in love with that. As I dove deeper into the internet at Ebay and then at Spark, I began to see how the internet enables innovation in many different areas that aren’t necessarily consumer driven. This will continue to evolve, but I’m so glad to have made a decision years ago to try to spend as much time as possible in a domain I find interesting.
3. Assuming Success, Would I Enjoy This Path in 10 Years?
Reality check: Almost all jobs have unattractive components. And at the entry/junior levels, most jobs kind of suck.
What I typically recommend to folks is to think beyond the initial years of a career to the “success” scenario 5 to 10 (or more) years out. Is that a life that is attractive to you? This requires some work to think about it practically. For example, it sounds like a very attractive thing to be a C-level executive of a Fortune 500 (and you get a nice paycheck). But what does that actually look like? A lot of travel, tireless hours, intense scrutiny from inside and outside the company, no job security, tons of company politics etc. It’s important to do the work to talk to folks who have achieved “success” and have a realistic view of what their lives look like.
Ok, so that’s the success scenario, but success is not a sure thing. When I was thinking about becoming a VC, I knew that I would enjoy the activities and subject matter, and it seemed like the success scenario would be attractive to me. But I wasn’t a professional investor, and that’s primarily what being a successful VC is all about. Honestly, I had some fear about pursuing this path because I knew that it’s hard to be successful in venture and it’s hard to go back into an operating role after a while.
Whether it’s right or wrong, I believe this requires a leap of faith. If you find a career that is a great match in terms of activities and subject matter and the success scenario looks good, I think you absolutely have to give it a shot. Assume success. Good things will tend to happen if you are doing the activities you love in areas that you find fulfilling.