How to get a job in venture capital (in Africa)


When looking for information on how to acquire a career in venture capital, you'll find that many of the articles begin with the author (who is typically someone who has worked or is working in the field) informing you how frequently they get asked for advice on how to break into the industry.

This is a unique circumstance. I'm not an associate at a venture capital firm, nor am I a partner at a seed stage company, and I also didn't just be hired there as an associate. I am a writer, and this post shows how Africans can find jobs in venture capital based on my research and discussions with several persons already working in the field. The very first step is always the most important one to take.

What exactly does "venture capital" mean?

To expand, it is necessary for any business to have access to capital; but, depending on the nature of your company and the stage it is currently in, you may have difficulty obtaining financing from traditional financial institutions such as banks.

Businesses that have a great potential for expansion often turn to venture capital, a subcategory of private equity, for financial backing. In exchange for their funding, venture capitalists receive an ownership stake in the company and the right to weigh in on managerial choices.

Venture capitalists, in contrast to other types of financiers, almost always put their money into businesses that they think will bring in enormous profits. It should come as no surprise that these investments are frequently high-risk, and the majority of venture capitalists anticipate that approximately 70 percent of their investments will be unsuccessful.

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Although venture capital has been available as a method of financing for companies since the 1940s, it is only very recently that African companies have begun to take use of this possibility. The amount of money invested in African start-ups by venture capitalists has been steadily climbing since 2015, from roughly $185 million in 2015 to approximately $5 billion in 2021.

What do venture capitalists do?

It is possible to divide the work that venture capitalists do into four primary categories: finding deals, conducting research on possible investments, persuading business owners that they are the most qualified investors for their company, and providing ongoing support to startups in which they have invested. The day-to-day actions of venture capitalists are encompassed under these positions; however, other aspects of establishing and managing the company are not covered by these responsibilities.

Although these jobs encompass what investors normally perform, it's important to note that not every employee at a venture capital firm will have every available position. For instance, entry-level employees at the majority of companies will be responsible for the sourcing of deals and the study of possible investments.

In most cases, senior staff members such as Senior Associates and Partners will be the ones to make investment decisions, convince founders, and support them once an investment has been completed.

What roles are accessible in venture capital?

In contrast to other well-established fields of work, the field of venture capital does not have a large number of available positions. This is especially true in Africa, where there are only a few local venture capital firms.

According to Baiyin Zhou, a Senior Associate at Ascent Venture Partners, there are approximately the same number of vacant positions in the venture capital industry in the United States as there are vacancies for professional sportsmen. To put this into perspective, the Bureau of Labor Statistics forecasts that between the years 2020 and 2030 in the United States there will be 3,400 opportunities annually for professional athletes.

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The path to a job in venture capital is comparable to the one you might expect to find in a management consulting firm.

According to Mergers and Inquisitions, the organizational structure of a venture capital firm will look something like this: Analyst, Pre-MBA Associate, Post-MBA or Senior Associate, Principal or Vice President, Partner or Junior Partner, and Senior Partner or General Partner.

P: S: Although the hierarchy of Mergers and Acquisitions is fairly standard, various companies may refer to these positions by alternative titles.

The educational prerequisites needed to enter the venture capital industry

There are not many clearly laid out routes leading to venture capital for most people. Some people enter the industry after selling their firms, while others enter the industry after working for startups, and still others enter the industry through the unlikeliest of channels, such as journalism. Michael Arrington and M. G. Siegler are two examples of individuals who were formerly employed as journalists but have now transitioned into the venture capital industry.

Although this might lead you to believe that anyone can get a career in venture capital regardless of their level of education, there are specific educational prerequisites that place you in a good position for employment like these.

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For example, biotechnology venture capitalists need a great deal more specialized knowledge, and it is typical practice for venture capitalists at such firms to hold advanced degrees such as master's degrees or doctorates.

More generally, positions define educational needs. There are no formal educational requirements for analysts, as their primary responsibilities consist of locating and analyzing business opportunities. On the other hand, colleagues who are responsible for more financial analysis will be expected to have some knowledge of finance.

Advice on obtaining a position in the venture capital industry

The venture capital market does not have a lot of open positions, therefore there is still a lot of rivalry for the opportunities that are currently accessible. The following advice will assist you in finding a career in the venture capital industry.

Help venture capitalists source deals

There are very few things that are as valuable to venture capitalists as a regular deal flow since it ensures that they will always be able to discover creative companies in which to invest. Providing assistance to venture capitalists in the search for and evaluation of startup companies is a surefire method to get noticed by them and earn a job.

Deals may be found by virtually anyone if they tap into their network, which is fortunate. You might also contact venture capitalists who have already made investments and make them an offer to bring business their way. This might be a paid service or a free one, but the labor that goes into sourcing these agreements can teach you some things about how venture capitalists operate. You may find interesting startups and founders by using social media because there are many people building in public now.

Network, network, network

The vast majority of hires are made through word of mouth, which is standard practice in newly developing businesses. It is more likely that somebody will recommend you for a position at a venture capital firm than it is for you to find the opportunity on LinkedIn. Therefore, the people in your network should be able to recommend you for employment or provide you with information regarding openings.

"The necessity of networking and reaching out and being a person of value can't be overemphasised in this business," says Gideon Dada, an Investment Associate at Metis Capital Partners. "The importance of being a person of value cannot be overstated." The majority of the time, the chance is only for one person, or at most two people, and the person who is recruiting is not an HR personnel member; rather, this person is simply interested in learning what you have done to demonstrate your interest in the field.

Conceive of or find labor in a new venture.

After making a first investment in a new business, the majority of a venture capitalist's work consists of fostering the growth of their portfolio firms and assuring its success. It was common for them to provide assistance in areas like as employment, marketing, finance, compliance, sales, and connections to other investors as a result of this. Therefore, having extensive expertise in any one of these support roles could help you land a job. [Cause and effect]

This may be seen by looking at various venture capitalists operating in Africa. PiggyVest was founded by Odunayo Eweniyi, who is also a partner at First Check Africa, a venture capital business that focuses on women entrepreneurs. Eloho Omame, one of the company's co-founders, formerly served as the Managing Director of Endeavour Nigeria, a nonprofit organization that focuses on providing assistance to entrepreneurs. Temi Awogboro, who is a partner at Magic Fund, was also a driving force behind the establishment of Evercare Hospital.

Conclusion

You may have noted that the three different routes described above did not specify what classes to take, although as we said before, having an MBA can help you get a job in venture capital. Obtaining a higher degree may increase your chances of landing a career in venture capital for more specialized investments, such as those in the hardware or biotech industries.

No matter what route you take to enter the world of venture capital, it is essential to keep in mind that there is no cookie-cutter strategy that will guarantee success. Some graduates will find work immediately after graduation, while others will have to get experience in a different field first before moving into venture capital.