The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies, 2nd Edition

CHAPTER 3 Building Your Career as a Venture Capitalist

“In California, you need a license to drive a car or buy a gun, but not to be a venture capitalist.”¹

—Marc Andreessen, cofounder, Andreessen Horowitz

There are no barriers to entry, indeed, to get into the business of venture capital at all.

As the industry evolved in the late 1970s, most venture professionals came from technology, business development, finance, and investment banking backgrounds. Don Valentine, founder of Sequoia Capital, started his career in the semiconductor industry. Tom Perkins, founder of Kleiner Perkins Caufield & Byers (KPCB), started at Hewlett Packard as the administrative head of its research department. In recent times, venture capitalists (VCs) have come from varied backgrounds; for instance, Sir Michael Moritz, chairman of Sequoia, was a journalist with Time magazine. David Cowan of Bessemer Venture Partners started after he received his M.B.A. degree, and he has been making successful investments for two decades. Entrepreneurs like Marc Andreessen, Ben Horowitz, Brad Feld, and Peter Thiel went on to launch venture funds after the maturation of their own start-ups.

An entrepreneurial background and operational expertise qualifies a practitioner to serve the portfolio company better than those who do not. But that's not necessarily an indicator of success. Fred Wilson of Union Square Ventures has no entrepreneurial background. He has invested in some of the leading technology start-ups ...