Today, one of the most lucrative career paths is that of a venture capitalist. A venture capitalist (VC) primarily invests in startups and helps entrepreneurs grow their ideas into viable, thriving businesses. VCs invest in these companies because they can earn massive returns — if the companies are successful. However, with a high ceiling comes a low floor, and VCs often experience high rates of failure because of the uncertainty associated with new and unproven companies.
As such, the best VCs have impeccable financial analytical skills, a penchant for spotting the winning horse, and a wealth of other unique attributes. If there is one person who is the embodiment of these attributes, it’s American entrepreneur and venture capitalist John Douglas Steuart. In addition to many other businesses, Steuart co-founded Claremont Creek Ventures (CCV). As the managing director, he has raised millions of dollars in funding from blue-chip companies. While there is no singular path toward becoming a venture capitalist, Steuart explains a few best practices for aspiring professionals looking to break into the profession.
Meet the Educational Requirements
As with most high-profile careers, education is key. Most venture capitalists earn their bachelor’s degree in business, economics, finance, accounting, mathematics, entrepreneurship, or related fields. Although an MBA isn’t a prerequisite for being a venture capitalist, it can set you apart and offer value-added educational experiences. For example, John Steuart graduated from UC Berkeley in 1985 with a Bachelor of Arts degree in economics. He then earned a Master’s Degree in Taxation from Golden Gate University.
Gaining the Right Experience Can Be Key
There are many paths one can take to become a venture capitalist, but entrepreneurship and investment banking experience can be invaluable. John Steuart explains, “One common path to becoming a venture capitalist is to gain entrepreneurship experience. If you have been a successful entrepreneur, you will have first-hand knowledge of what new entrepreneurs need. This can help you gain their trust. At the same time, entrepreneurship experience can help you accurately assess the worth of a startup.”
In addition to entrepreneurship, many venture capitalists start in the investment banking industry. Experience in this industry offers a unique advantage because the skills of investment banking professionals aren’t very different from those of venture capitalists. These shared skills include excellent business acumen, analytical skills, exceptional communication, negotiation skills, foresight, and investment accuracy.
Venture Capitalists Must Be Excellent Communicators
No matter the field, communication is paramount. But the stakes are exponentially elevated in the venture capitalist profession. While excellent financial analysis skills are a must, most venture capital firms prefer someone with a personality and the ability to deliver a masterful presentation. As a venture capitalist, you must be persuasive and comfortable working with top-level executives.
Join a Venture Capital Firm
If you want to fast-track your career as a venture capitalist, you should join or intern at a venture capital investment firm. This can provide first-hand knowledge of potential startups in your field. If you’re a budding investor, becoming a venture capital association can allow you to climb the ranks and spend valuable time researching new startups.