An Investor’s Rendition of ‘Twas the Night Before Christmas

Peanuts Christmas Panorama by Kevin Dooley

by Travis Cocke (sourced from Seth Levine)

‘Twas the night before Christmas, when all through the land
Not a banker was lending, not even “Gold-Man”
Foreclosures were hung by the courthouse with care
In hopes that Hank Paulson soon would be there.

The Bankers were nestled all snug in their beds
While visions of bonuses danced in their heads.
And my teachers in their offices and me in my room
Had just settled an argument about the depth of the gloom

When out on Wall Street there arose such a clatter
I sprang from my bed to see what was the matter
Away to the computer I flew like a flash!
Started up the ticker, and threw up some cash…

The i-banks on the brink of another bad blow
Sell all your stocks and look out below!
When, what to my wondering eyes should appear?
Green on the screen as the Fed interfered

With the same old chairman, so ready to lend
I knew in moment it must Big Ben
More dovish than Greenspan, his governors they came
And he printed and lended and called them by name!

“Now Lockhardt! now, Lacker! now, Evans and Plosser!
On, Geithner! On, Fisher! On Yellen and Krosner!
To the Treasury! To the Mile High Mint!
Now print away! Print away! C’mon now print!”

As credit spreads that before defaults do fly
When they meet with an obstacle, they drop green from the sky
So up to the Capitol the governors they flew,
With a chopper full of money, and Rick Wagoner, too.

And then, in an e-mail I read from a friend
Capitalism was dead, and this was the end
As I sold my last stock and started to cry
On the TV came Buffett and he said “Time to buy.”

He was bullish on stocks, from Nike to CVX
And his portfolio was tarnished with options and CDS
A bundle of buyouts he had flung on his back
And he looked like a genius, just following his knack

His stocks how they fell! His returns how scary…
Yet his cash-how it swelled! And His letters so merry…

He was chubby and cheerful, a right jolly investor
And I smiled when I saw him, despite my dreadful semester
A twinkle in his eye and the use of his cash
Soon gave me the know that stocks wouldn’t crash

He spoke not a word, but went straight to his work
Shoring up balance sheets, and buying preferreds
And laying his finger aside of his nose
And giving a nod, UP & UP Berkshire rose!

He sprang to his NetJet, to his pilot gave a whistle,
And away they all flew like the down of a thistle.
But I heard him exclaim, as he drove into the sky,
“Happy Trading to all, and to all a good buy!”

Featured Image by Kevin Dooley

9 Tips to Network Your Way into a VC Job

[Editor’s Note: This is a guest post by Jared Gordon . Jared is an Investment Manager at IAF and is a lawyer by training (though we don’t hold that against him). The post summarizes Jared’s experience in both finding a gig at a Canadian VC fund and his conversations with others about these elusive positions. ]

CC-BY-20 Some Rights Reserved Photo by Robert Couse-Baker

It is that time of year again, when my inbox fills with requests for coffee from graduating students asking for two things: “How do I get a job in venture capital?” and “How do I get a “biz dev” job at a startup?” I always appreciate the initiative of people reaching out to me, but I thought I would share some tips to maximize everyone’s time.

Getting a job in venture capital is hard.

It is not impossible. But it is very hard. If you are the kind of person who is interested in venture capital, you will probably ignore anyone who says the problem you are trying to solve is hard. If you are the kind who is committed you will also realize it is not about the money. We do it because we love working with startups.

There are not many funds out there, but at least that narrows the focus of your search. To give you a better idea, there are maybe 10 non partner venture capital roles in all of Canada. Everyone I know in venture capital has worked many years to get here. It requires drive, energy, time and a lot of networking. In truth, the only way to get a job in venture capital is networking.

The Difference between PE, IB and VC

The journey prepares you for the job once you get here. People I met with along the way are people I now do business with on a daily basis. Also, the job hunt is a chance to demonstrate to the community what kind of person you are and what kind of value you add.

Before we jump into the tips, there is a difference between PE (Private Equity) and VC (Venture Capital). Beyond the huge difference in compensation, VCs spend a lot more time understanding the dynamics of specific markets and verticals than they do on financial analysis. In PE you spend your time building and reviewing financial models. When working with startups, you spend some your time crafting financial models, however, the calculations and models are very different.

There is no template for working in VC

Some basic tips on how to network your way into venture capital are listed below. These tips are about how to get in front of the people you need to get in front of and how to make the most out of that meeting. There is no template for working in venture capital. Some of us have advanced degrees some don’t. Increasingly, having spent time at a startup is becoming more common. Having strong technical talent is a rare but desired commodity. If you can identify how technically hard a problem is, that will set you apart.

9 Tips to Getting a VC Job

  1. Don’t send a message over LinkedIn – This one is my primary pet peeve. A lot of the job of being a VC is being able to find information. Every investor’s email is available somewhere.
  2. Warm intros work best – Did I come to speak to your class? Did I come speak to your friend’s class? Do we know anyone in common? Anything you can do to create a connection between us will make me want to spend more time helping you.
  3. Don’t be scared to cold email – Cold emailing is a great skill to learn and have. You never know whose interest you might catch unless you try. Why not reach out to Fred Wilson? A partner at Kleiner who went to the same school/has the same interests as you? I find the cold emails that work best have great subject lines and can bring attention to something I, and the person I am emailing, have in common.
  4. NO FORM LETTERS – These are just insulting. You should be spending at least twenty minutes crafting each email. The person you are trying to get in front of has a linked-in profile/about.me page/bio somewhere. Use that information to show them that you value their time and advice enough to put some work into getting the meeting.
  5. Be persistent but not annoying – When I do not get a response from a warm intro, I follow up after a couple days. Some people have poor inbox management skills and stuff falls to the bottom. It is nothing personal. The person definitely saw your email and it shows persistence and that you value someone’s time when you follow up. With cold emails, if I do not hear back I will wait a couple days and send a quick second try. If I hear nothing, I leave it be.
  6. Be clear in your ask – The clearer and more direct you are about your ask, the easier it is for someone to know if they can help. Nothing is less appealing than a note asking to “learn more about venture capital.” The internet has cast the profession wide open, with more information available online now than was available to VC associates five years ago. You can learn about everything from VC funnel management, what the average day for a VC is like to the difference between European and American style waterfalls. Examples of good asks would be: “You are an early stage VC. While doing my MBA, I mentored startups and participated in Startup Weekend. Can I get half an hour of your time to talk about how I can transfer what I learned in school to a job or what else I can do to make myself a competitive candidate?” or “I want your job because I like working with early stage startups. Are you hiring? Can we make some time to chat so when you are, or when you know someone who is, you think of me?”
  7. Once you get the meeting, don’t blow it – You have only one chance to make a first impression.I spent the first months of my networking journey wasting a ton of important people’s time. I would sit across from them in boardrooms, coffee shops, and their offices and talk about myself for an hour.It took a meeting with Jeff Rosenthal of Imperial Capital to set me straight. He would not remember if you ask him, because the meeting was so bland. Jeff ended our meeting with some advice. He told me that everyone who got a second meeting walked into his office with a list of companies they would look to invest in. They proved they were capable of doing the job they were seeking. You can do that too.Look at the person you are meeting with and what spaces interest them. Use Crunchbase and Angelist to identify some promising startups and why you like them. Be prepared to defend your thoughts. This discussion is more interesting (and fun) then hearing about your involvement in the investment club or student government. One person I met with had a presentation he had put together on three trends in technology that he found interesting and why. They showed they were capable of hitting the ground running on day one.
  8. Follow up is key – Always make sure to send a thank you and take care of any action items you might have left the meeting with. If the person you are meeting with did not follow up on theirs, no harm in waiting a couple of days and sending a polite reminder.Following up does not end with the thank you note. It is always great to hear from people you have helped along the way about where they landed or how their search is going. This becomes especially important when it comes to the last tip…
  9. Coming close to something? BRING IN THE BIG GUNS!! – When you know there is a position and you have met with someone at the firm or submitted an application, now is when the networking pays off. You can make up for a lot of flaws in your resume by having someone you trust recommend you for a gig. If you treat your network right and maintain good relationships, they will have no problem making a call to get your application moved to the top of the pile.

This is where hard work pays off

Mark Suster summed it up in a comment on a blog post by Chris Dixon:

“The people who “sneaked into” the process were:

  1. great networkers
  2. great networkers and
  3. had other people contact me on their behalf (great networkers).

But if you don’t have GREAT street cred already don’t hassle the VCs. Just accept that it isn’t likely you’ll get in without doing great things at a start-up first.”

Chris Dixon agreed “Yeah, when I got my job in VC it was like a political campaign. I had one partner tell me ‘I’ve heard you[’re] a great guy from 6 people’ – which wasn’t an accident. I had done so many free projects, favors etc for VCs and startup and then I asked them to make calls on my behalf. It’s brutal.”

The venture capital community is a very small tight knit community. And the number of potential gigs is very small. It is a lot of effort to build the relationships and connections to get a job working at a venture fund. (Before you even consider this, you might want to brush up on Venture Math 101 and figure out why you really want to do this).

Additional Reading

Here are some great posts from people with more experience and authority on the same topic:

Still want some of my time? I am not going to tell you how to find me, but if you can figure it out, I look forward to chatting.

Photo Credit: Photo by Robert Couse-Baker  – CC-BY-20 Some Rights Reserved

2011: Glass Half-Full or Half-Empty for Canadian VC?

Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in February 14, 2012 on MarkEvansTech.com.

CC-BY Some rights reserved by waferboard
Attribution Some rights reserved by waferboard

First, the good news about Canada’s venture capital landscape. In 2011, investment activity climbed to the highest level in four years ($1.5-billion), a 34% increase from 2010, although it is still significantly below the record activity ($2.1-billion) reached in 2007.

The bad news is there’s still not enough supply to meet rising demand, plagued by “continued weakness” when it comes to fund-raising.

The good news-bad news scenario was spelled out in the Canadian Venture Capital Association’s annual report. For those of us in the glass half-full camp, the increase in investment and the number of deal is cause for optimism.

As well, 2011 saw a spike in M&A activity with 34 deals, including two each by Google, Facebook, Zynga and Salesforce.com. And there was a flurry of incubators and accelerators established, including Extreme Startups last week.

Before anyone gets carried away, Canada’s venture capital landscape is a long, long way from being solid, let alone robust. There’s still not enough venture capital for seed, series A or major rounds. And don’t expect U.S. investors to pick up the slack.

In a press release, CVCA president Gregory Smith said there is concern about whether enough fund-raising can be dong to support the demand for investments. This situation was illustrated by the fact new commitments to Canadian VCs were flat last year at $1-billion.

“Canada has a historic opportunity to become an innovation leader,” Smith said, adding that “in order to act decisively on this opportunity, we must first overcome challenges to supplying VC funds that, in turn, supply entrepreneurs.”

So what’s the solution? How can Canada’s venture capital community do a better job of supporting the startup community? There is not easy answer to a problem that has been around a long time and doesn’t look to be changing any time soon. It’s not going to be an easy fix from government or U.S. investors or institutional investors waking up to the idea of venture capital investing.

Perhaps the answer to the problem is this: success. If more startups and mature high-tech companies are acquired, that could (emphasis on “could”) encourage investors (angels, VCs and institutional) to get more involved. Success has a strange way of helping people to see the light or new opportunities that they otherwise would have dismissed or not seriously considered.

That said, success is a double-edged sword. Without enough financial support, it is hard for startups to have enough powder to become acquisition targets. If they’re not interesting targets, there’s no acquisitions and, likely, less interest from investors.

So which side of the fence do you sit on? Are you bull or a bear about Canada’s VC landscape?

Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in February 14, 2012 on MarkEvansTech.com.