Are you sure you really want to do VC?

More and more graduates and entrepreneurs to engage in VC (venture capital) as their own ambitions, and even deeply yearning. But is it really as simple and beautiful as it is supposed to be? Here are some paragraphs to explain.

First quoted an old article, about the professional test of VC, the original author is Guy Kawasaki.

--------------------segmentation without sense of existence-------------------

I don't know how many people are taking venture capitalists (VC) as the ultimate career goal. I have a lot of people around me (of course I want to be more of an investment bank, because investment banks are relatively low). They often in the industry know very little time, vowed to become a VC, as young girls on the streets as exciting as the fashion. They don't know, it's not like you know. Every star to produce a sacrifice millions the same excellent entertainer's cruelty is determined to sacrifice spotlight lamp, in fact, is the same ridiculous.

VC and entrepreneur have one of the most important things in common: you are not just for the money, but to help others to live better, rather than die faster. Shen after the success of the Sequoia China, the intensity of work every day than when their own business is larger. Many people are puzzled, even friends also puzzled: "At least Shen is already one of China's top 100 rich, why he is so diligent, I do not understand." "If you can understand the rationale, you have the prerequisite to do VC." If you are not a kind-hearted, helpful person, it is still the time to break the idea of VC. The best thing for your life is speculation and corruption, and if you don't have the guts, you'll never get rich in your life.

VC or entrepreneur, and finally survive, but also to live well is the basic moral, conscience and sense of responsibility of the people. It is a pity that our education never teaches students the benefits of life from this simple and practical point of view.

My friends who read this article, if you become a successful VC after many years, don't forget to write and tell me and I will be glad to toast you.

We're in a bubble, and if you want more evidence, I'll give it to you: young people are trying to squeeze into the venture capital industry. I receive several similar cover letters each week, as follows:

I'm going to graduate from college, majoring in economics. I always ("always" the word for the more than 20-year-old child is what the concept, I am far away ...) Interested in starting a business. And I'm hosting an entrepreneurial club at school. I'm an analyst at Goldman Sachs and now I want to get into the venture capital field to deepen my understanding of entrepreneurship and help entrepreneurs with the knowledge I've learned in the past. I can operate PowerPoint, Excel and Photoshop skillfully.

VCs do look great: shuttling through cocktails and party parties, taking private jets, drowning in piles of entrepreneurs, earning a basic salary $500,000 's annual income, plus a $16-billion sale of YouTube. Who doesn't want a job like this? (To tell you the truth, I want to.) )

First of all, let me tell you a shame: I am not a "successful" venture capitalist. I have been in this business for 10 years, but I have not succeeded in making a big and vigorous deal. Therefore, I may not be a good candidate to offer advice, but does lack of knowledge prevent you from becoming a blogger?

Well, here's a little caveat to me about being the hero of the future star entrepreneur:

Venture capital should be the end of your career, not the starting point. It's your last job, not your first.

My theory is that when you are young, you should work 80 hours a week to develop a product or service that changes the world. Instead of sitting in the boardroom, listening to the entrepreneur explain why she failed to complete the plan, watching your email on the BlackBerry, and then suddenly burst out with a few words ji: "You should join hands with MySpace;" I can introduce you to a few of our failed companies. ”

And entrepreneurs should be dismissive of young people who choose venture capital rather than entering the "real world". Why listen to suggestions from those backgrounds that do not exceed school bookstores or tinker with spreadsheets at investment banks? The financial model is almost irrelevant, because juggling financial tricks is nothing to do to make a good product and sell it.

I concocted a venture capitalist aptitude Test (VCAT) to help people determine whether they are suitable for the venture capital industry. If you want to participate in the online test, please click here. My friends at Tepco Pulp helped me make this test for me. Get It!

Part I: Working background

What is your professional background?

Engineer (plus 5 points)

Sales (plus 5 points)

Management Consulting (minus 5 points)

Investment bank (minus 5 points)

Accounting (minus 5 points)

MBA (minus 5 points)

The ideal venture capitalist is the background of an engineer or sales person. An engineer's background helps you understand the technology to invest in-for example, whether the entrepreneur ignores the laws of physics. The sales background can help each entrepreneur introduce a new product and sell it in the market. Let me preach in this blog for the third time, "sales solve all problems." ”

The worst three professional backgrounds for venture capitalists are management consultants, investment bankers and accountants. The downside of management consulting is that you believe "implementation is easy to find," and startups are the opposite. The downside of investment banking is that it makes you superstitious about spreadsheets; companies are built for Wall Street rather than customers. Moreover, investment bankers tend to do deals rather than build companies. Accounting misleads you into thinking that history can not only repeat itself but also show the future.

The last point is about the relationship between MBA education and venture capital careers. The advantage of this degree is that it can help you provide some additional tools and knowledge for making investment decisions and helping entrepreneurs (for example, calculate $16 billion of $25% trillion). The downside is that getting the degree (I have one) causes most people to have a hollow sense of arrogance towards those fledgling entrepreneurs. In a word, it does more harm than good.

Part II: Firsthand experience

You may be in the right place, but you have to have the right experience in the proper places. Specifically, have you encountered any of the following events?

have been battered by a vast and prolonged recession and thus understand how powerless they are. (plus 1 points)

Once worked in a successful start-up enterprise, so the success of entrepreneurial success can be talked about. (plus 1 points)

Once working in a failed start-up, you understand three things: first, how hard it is to succeed, and second, the world doesn't owe you anything, and third, what it feels like to be fired. (plus 3 points)

Once worked in a public company, you really know what the ultimate goal of a company is. (plus 1 points)

As CEO, you will no longer run a start-up from a board perspective, after you have been disillusioned with the system operation. (plus 2 points)

I used to be an angel investor with my own money, so I understood the fiduciary duty of investing in someone else's money. (plus 2 points)

Part III: Essential knowledge

Finally, can you answer the following questions for the founders? Because this is the advice that entrepreneurs need to get. (Don't worry: many of the current venture capitalists are also on this part of the boat)

How can I recommend a product without a budget? (plus 2 points)

How can I be sure that my product is really in demand? (plus 1 points)

What if the customer hates our first product? (plus 1 points)

How can I get Walt Mossberg (note 1) To call me back? (plus 2 points)

How do I go with the demo guy? (plus 1 points)

How can I get on TechCrunch? (plus 1 points)

How can I get Fox Interactive to call me back? (plus 1 points)

How can I capture a market that already has five of companies doing the same thing? (plus 2 points)

How much time, energy and money should I spend on patent protection? (plus 1 points)

We bet on the wrong product structure. (plus 2 points)

What kind of people should I hire: young, old, inexperienced, experienced, underpaid, paid, local, field? (plus 1 points)

How can I let my employees go without spending too much money? (plus 2 points)

How can I tell my best friend because he is co-founder, so he can't be CTO? (plus 2 points)

How can I get retailer's buyer to call me back? (plus 1 points)

How do I handle a customer who asks for a return product and gets a full refund? (plus 1 points)

How can I fry people? (plus 2 points)

How do I make a company cut? (plus 2 points)

Test results

Measure whether you are ready to become a venture capitalist by following these guidelines:

40 points or more: Call CalPERS (note 2) and tell them that you are raising a new venture capital fund.

35 to 39: Call Sequoia and Kleiner, Perkins (note 3) and tell them you're willing to join.

25 to 34 points: Spread your resume to 2,000 venture capitalists and pray.

24 points below: Before you can score higher, do what you have to do, and continue on the southwest extensively.

Summary: You can become a venture capitalist after a catastrophe. There are at least two positive effects: first, you can stand out as a group of trash-throwing artists who are young. Second, you can really help your invested company-that's what venture capital should do. We'll see you in 10-20 years.

Nasa：

Note 1:walt Mossberg is the main columnist for The Wall Street Journal's technical column.

Note 2: All known as California public Employees ' retirement System, is a large pension fund in California.

Note 3:kleiner, Perkins also called Kleiner, is another famous VC Dune road. Invested companies include Amazon,aol,compaq,ea,google,sun and so on.

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If a fresh graduates or a long time after graduating from the new people want to join the VC, will usually be two requirements-

If it's the second one, it's a good choice. If it's the first one, make sure you've got it all figured out. First of all, you join the identity is associate or analyst, waiting for you is a lot of "miscellaneous work", real miscellaneous work. After a few years in the past, unless the privilege of promotion, otherwise you will find that you are always short of the so-called "practical experience", and there is no "financial knowledge", compared to the steady development of the bank's accumulated experience over the years, can only wait to throw a good project and some light, or re-enter the actual company operations.

Without real experience or industry resources, even if you grow into a higher level VC position, you will still face the following problems

1. No feeling about money. Because you've been spending money on funds, and because venture capital itself is in danger of being wiped out, you're less likely to take the blame and feel less pressured to go bankrupt.

2, the face of outstanding companies have no clout. Maybe 95% of the companies you touch are developing in general, but the real value is just 5%. And when you're enthusiastic about communicating with the CEO of these great companies and expressing your opinion, it's just a waste of time for the other person, because--"do you know the hair?" ”

3, no feedback. Most jobs have feedback, work for a year, two years, or more, you know your business results, and you know your peers better than you do. Even on a small project, it's easy to get feedback and benefit from users, bosses, etc. But VC often waits several years to obtain the result, and this achievement even is a failure. And the market has changed, technology has changed, the industry has changed, you may find your hands empty, start from the beginning.

4, difficult to understand their strengths and weaknesses. If you are lucky enough to join an excellent VC and work with a good partner, you can find your strengths and weaknesses in comparison with their working methods, thinking results, decision models, and people. But if you start working without any experience, how do you know if you're working with a good partner?

5, difficult to verify their growth stage. To be able to become Dudangyimian VC people, you need to see other people can not see the advantages of the team, project potential, industry trends, the need to dare not under the note of others. But the problem, VC technology which strong? How do you know you're right, not because you're a couple of years old enough to be self-righteous? In this line, Super B, Super Bull B and Super stupid B are very similar in some stages.

--------------------there should be a barrage flying-------------------

Wang Yu said: "From my personal background and experience, the future must be the entrepreneur in this room after the successful, more suitable as angel investors, because the early project is a half partner, this angel investor is not only a financial investor, but also is a real with the entrepreneur with the fate of breathing, or to do project analysis, Can also help people, change, so that only experienced the whole process of entrepreneurship, only know the hardships in the entrepreneurial process, you know what he needs most in the first stage, what he needs most in the development phase, when the management will be a problem, when you tell him about building a corporate culture, these things have not experienced this bad person , do angel investors are very difficult, so why I said angel investors are entrepreneurs, including me, I was involved in Baidu's earliest entrepreneurial process, I know Baidu from zero to 10,000 people throughout the process, experienced what things. ”

So, many people will say, I have the industry background, engaged in major projects, have the vision of strength, do VC alone. Good, but you'll come across a few depressing things

1, the return is not necessarily high. VC than the successful entrepreneur, the return is not too much, compared to a very successful entrepreneur is far worse. Really can do a good job of VC, the ability to need than entrepreneurs may have to integrate a little, you not only have the experience of entrepreneurship, industry background, as well as the ability to help entrepreneurs financing, but also to the business of the ability to comb. And you have to manage dozens of projects at the same time, so it requires a higher overall management capacity, not so easy. To do VC, it is necessary to expand the field before you engaged in the industry, new areas of the project if you do not understand, the probability of failure is relatively high.

2, not deep enough. Perhaps the past experience has made you think you have enough industry to know, but sometimes it will become a hindrance to you. Because you have a better understanding of industry rules, a clearer picture of early-stage projects, a better understanding of what entrepreneurs need to help, but some real innovation for the future must come from entrepreneurs. As you move away from the industry, the ability to be sensitive to the breakthroughs will begin to decline, not to mention the industries you haven't been deeply involved in.

3, the past hard work, now hard to make a decision. Even if you are the CEO of the position, make the decision is not as good as VC in case. As investors make decisions every day. You may have a good business ability and breakthrough ability in the past, but if faced with tens of millions of of investment entanglements, the face of small cases also tangled, night to think about going to sleep, that basically can not do this line.

4, information overload, parallel operation. As the CEO, to catch Big put small, to find the key, and as a VC, the most important thing is to quickly filter information, before you contact the case, you can never directly under the conclusion that you need a lot of contact with the project, screening out the need for communication, and then screening for in-depth communication. As CEO, you may want to concentrate on doing one thing, putting aside distractions, doing the next thing most efficiently, and handing the less important things to partners and subordinates. However, as a VC, the higher your level, the more things to do, the end means that you have to fill the time full and full, as the row does not go in, can only be dealt with at the same time, even if the process of dealing with this matter, may be parallel.

5, Team hair. Maybe you've been brainwashed in a variety of different ways, such as teamwork. However, VC is lonely, and even the stronger the less VC people, their respective roles, and even potential competitive relationship. Here, the belief is that everything is done for itself. What the? Can't handle it? What do you need? As a former CEO, it is more necessary to adapt to the relationship between the project, from the game player's status to a consultant is not as good as the state of the relationship.

--------------------the last time-------------------

It is one thing to be able to work, but to work well is another.

Let's say you're successful in the VC career path, soar, but I'm still not sure if you really like it, because it will face these things

1. Politics. Politics is everywhere. There may be politics between the partners, there may be political between the different geographical branches, and there may be political between the investors, and the next round of the investor may have political, and LP dealings may be politically ... Of course, politics here is less of a negative implication. However, whether you are a mature and rounded person, directly affect the long-term development.

2. Time. And do not say from a project to harvest results for many years, the entire VC industry is to use time piled up. You find that a good case is not available because you are not a partner and you find that you cannot get enough money because you are not a partner. After you have been partners, found that the qualifications are not enough to raise funds, is still a part-time job ... Wait until you make a fund, found that the time left for you is very tight ...

3. No stimulation. No matter how stressful you feel, it's not as stimulating and profound as the life of an entrepreneur. And, as you experience more and more, more resources, more money, the risk is actually falling, perhaps you can indirectly feel the investment company experience of happiness, sadness, despair or passion, but your experience is difficult to have a real "passion" to speak of.

4. Bad news. For VC, there is a 282 theory, that 20% companies will grow very well, 20% will soon hang up, 80% of the company either back to the most or make a small profit (for the angel may be 191). So, you hear every day is the company not so good news, every day to help the company to find ways. As for the good company, they rarely fill you with trouble, as good news, even once a year, can not compete with the mass of bad news. If you are a person who needs positive energy stimulation to be happy, weigh it.

There is a case of a separate account

Aside from the work content and preferences, if you just because you feel that the project has always been very accurate VC, then: Rich have the judgment, suitable for VC. Money does not have a knowledgeable, suitable for LP;