Being A Venture Capitalist: A How-To Guide — Hometown Station | KHTS FM 98.1 & AM 1220 — Santa Clarita Radio

If you’ve spent time in the tech or finance world, the words “venture capitalist” are probably familiar to you. Venture capitalists such as Carter Reum make their money by

• finding promising startups (usually tech)
• infusing them with funds
• nurturing them to success
• getting their investment and a substantial profit back when the business is sold or goes public

Considering that venture capital infusions can run into the millions of dollars, the return on that investment can be staggering. It sounds easy, right? Just four steps to incredible riches. Imagine the self-esteem boost that would bring… getting rich by being part of another business’s success. That doesn’t even touch on perks like setting your own hours, working remotely, and essentially calling the shots for your own enterprise.

With those kinds of prospects, who would pass up the opportunity to become a venture capitalist? As with most opportunities that come with high rewards, there is a lot of risk and expertise that goes into succeeding. Before you decide if it’s the right career path for you, let’s take a look at how to become a successful venture capitalist like Carter Reum.

Education

Only around 50% of venture capitalists have an MBA. While not required, an advanced degree in finance from a leading institution such as Stanford or Harvard University is still advantageous. This is especially so if you’re looking to get your start as an employee of a venture capital firm. Venture capitalists who come from a finance background will tend to look for those same qualities in potential hires.

In a more practical sense, an MBA will help you with skills like market research, understanding business plans, and crunching numbers quickly. An MBA will also help you grow your network quickly and connect you with organizations looking for students who want careers in finance.

Two Basic Paths

There are two basic paths to becoming a venture capitalist:

1. Entrepreneurship
2. Investment Banking

Today, venture capitalists such as Carter Reum come mostly from an entrepreneurial background as founders themselves. Venture capitalists are interested in getting involved early in a company’s development. Having the operational experience to take a company from founding to successful exit brings a lot to the table for the business’s founders.

Knowledge and experience in investment banking tend to be more important when dealing with later-stage companies. In those situations, investment banking is helpful in financial engineering, the creation of financial syndicates, and knowledge of initial public offerings (IPOs) and mergers and acquisitions (M&A).

Grow Your Network

It’s never too early to start growing your network. These are the people who know people and can connect you with who you need to talk to. If you’ve earned an MBA, then you’ll have already started to grow your network. This will be especially important if you’re looking for a job at a venture capital firm. Carter Reum and other venture capitalists know the power of networking. So should you.

Work in the Field

This is a great way to earn real-world experience. Working at a venture capitalist firm gives you the inside scoop on how it all comes together. You can then leverage that knowledge into advancing your career. This can also be a confidence booster, giving you the self-assuredness to apply for more competitive roles. It’s an opportunity to grow your network, too. Interning at a venture capital firm can be a way to get your foot in the door.

Look For Mentorship

Finding a mentor is one of the best ways to accelerate your success in almost any endeavor. This can be someone in your network, someone at your workplace, or anyone who has the proven experience to guide you. They can help you decide in real terms which companies are good or bad investments. Make sure your mentor is someone you trust and get along with.

Get Your Hands Dirty

The easiest way to get started as a venture capitalist is as an angel investor. With a network, job experience, and mentoring, you can invest your own money into a business that you see potential in. If the business is successful, you’ll earn a profit. You can take that profit and invest in another business. You can also take successful earnings, pool them with people in your network, and grow your own venture capital firm.

Making It Happen

The hard truth is that 90% of startups fail. That means that, as a new venture capitalist, you have to be extremely savvy and knowledgeable about who you invest in. Not even Carter Reum can pick the winner 100% of the time.

For that reason, you’ll need a thick skin when it comes to saying “no,” because you’ll be saying it to a lot of aspiring businesses. Your job is to pick the winners, not make charitable contributions to failures.