The Business of Venture Capital, 3rd Edition

4Welcome to the Land of Ad-Venture

In a business of 10X outcomes, there are 100X applicants for every open position. And within the best venture firms, there are no openings posted publicly. Firms are small, tightly knit groups — a rock band, or a sports team of high performers — and bringing in a new team member requires careful thought, planning, and execution, else the whole thing blows up. Partners are vetted carefully over multiple engagements and long dating periods and are hired within known circles. Philosopher and author Joseph Campbell once wrote, “A bit of advice, given to a young Native American at the time of his initiation — As you go the way of life, you will see a great chasm. Jump. It is not as wide as you think.”

There are no barriers at all to entry, indeed, to get into the business of venture capital. The veritable pipeline of wanna-be investors is infinite and never-ending, with eager-beavers, gold-diggers, carpet baggers, opportunists, and some very few prepared minds. To practice law or medicine, you have the bar examination. Or enroll in a residency, put in grueling hours and start at the bottom of the proverbial ladder. The venture capitalists’ career path is not barricaded in any way, except intellect and investable capital. Some VCs have both.

ROLES AND RESPONSIBILITIES OF A VC

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

—Marc Andreessen, co-founder, Andreessen Horowitz (A16Z)

At New Enterprise Associates ...