The Business of Venture Capital, 3rd Edition

2Why Choose a Career in VC

Fueling the frontiers of innovation, being an agent of change, supporting the next generation founders, asymmetric financial gains, freedom/autonomy from the 9-to-5 drudgery, or the thrill of building companies — the role of venture capitalists is never dull. If anything, it is like a drug — easy to get hooked and high, harder to let go.

CREATIVE CONSTRUCTION

One of the influential economists, Joseph Schumpeter, coined the term creative destruction, where industries are decimated when innovative trends occur: The “gale of creative destruction” whips through the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” On the other side are where the forces of creative construction, entrepreneurs and venture capitalists, are at work. When a paradigm shift occurs in any technological ecosystem, it is more likely that a founder and some venture capital investors are stoking that disruptive entrepreneurial fire. “See, venture capital is reducible to a few words. You have to be interested in managing change, and you have to recognize that change is necessary,”¹ says Donald T. Valentine, founder of Sequoia Capital. To be a part of creating that new new thing can be immensely satisfying.

INTELLECTUAL STIMULATION

A career in venture capital investing is “the most fun you can have with your clothes on,” says Deepak Kamra of Canaan Partners.²