What is the most difficult situation that a startup company faces? There can be plenty… But the most struggling one is — finding the right venture capitalist or investor who would financially support the business. Undeniably, a venture capitalist acts as a catalyst for the entire startup ecosystem.
But who exactly is a venture capitalist? What does a Venture Capitalist do? And above all, how you can become a Venture Capitalist? What are the benefits involved?
WHO IS A VENTURE CAPITALIST?
A venture capitalist is an investor who spends or funds their money on small companies or startups looking to diversify their business. Venture capitalists generally invest in companies in niches that they have experience in, or are knowledgeable and confident about.
For instance, Google Inc is a major venture capitalist. Its division, Google Ventures, founded by Bill Maris, provides seed, venture, and growth-stage funding to tech companies.
WHAT DOES A VENTURE CAPITALIST DO?
A venture capitalist is a quick-witted professional who researches various investment opportunities and meets with leaders of leading and promising companies. After venture capitalist makes up their mind to invest, they start the process and provide the necessary funding.
But what does the venture capitalist firm gets?
In return, the company provides an equity stake to give the venture capitalist a way to earn once the company starts reaping profits. Equity Stake refers to the part of a company that a person or an organization owns, represented by the number of shares they have.
A venture capitalist is a risk-taker who funds a new startup with a belief to take significant returns when the company gets successful.
HOW TO BECOME A VENTURE CAPITALIST?
There may have several ways to enter the VC world, however, can be summed into two categories:
- Serial Entrepreneurs
- Tech-oriented investment banking
VCs are tech business experts, financial advisers, and academicians, with financial industry experience.
Here is a five-step process for becoming a venture capitalist.
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Relevant Education
A venture capitalist must at least have a bachelor’s degree in business because a business degree provides the requisite skills necessary for reading and comprehending business plans. Education is not really an exact requirement to pursue a career in venture capital but there is no harm in learning some basics. On top of that, getting the basic education can give your resume more credibility and help you build a much stronger network.
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Build Your Own Entrepreneurial Opportunities
This is quite a very excellent approach to make your path to becoming a successful venture capitalist. Many venture capitalists begin their careers by building their own entrepreneurial opportunities and the perfect example can be, becoming an angel investor.
When you become an angel investor, it gives you the opportunity to invest your own hard-earned money into a business venture. When you see your investment growing over time and giving a substantial return on your investment, it gives you the confidence to invest the returns into another company and start the cycle over and over again.
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Seek The Right Mentorship
“A mentor is someone who sees more talent and ability within you, than you see in yourself, and helps bring it out of you,” once said Bob Proctor. This clearly arrows over how important it is to seek the right mentorship.
You are new to the world of venture capital. It is important to find a mentor who guides you to choose which companies to choose for the investment. You can explore the opportunity of working as an intern or assistant in a venture capital firm as this can help you learn the basics of this field. Once you learn the crux of the investment world, you can find a mentor you can look up to, to learn the insights of this field. Make sure that you build a productive and meaningful relationship with your mentor.
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Experience Matters
Have you ever heard, “Experience is one thing you can’t get for nothing”? If yes, then you are on the right track. Relevant work experience is a requisite element if you wish to start a career in venture capital. The venture capital industry is full of experienced people with profound knowledge of banking, consulting, and product development.
As you are about to enter a highly competitive industry, you need to gain boatloads of confidence. Therefore, work experience in your respective field can boost your confidence and prepare you to perform better. The bonus — you will feel comfortable in the new environment and will be able to think outside the box.
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Engage With Venture Capitalists and Other Professionals
Networking with successful venture capitalists can make your journey less stressful. If you want to grow professionally, you have to build strong connections with them. You can take the help of a very efficient professional networking platform, Linkedin to find the relevant people to connect with.
You can also use Linkedin to post and share your ideas related to venture capital and investment. When you will start getting engagement on your posts, you will gain an ample amount of confidence.
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