Continuing on from my last post.. an MBA looking for a start up opportunity..
I think it’s important when you approach early stage start-ups and Venture Capitalists to clearly articulate what value you could bring (particularly for small ventures) but try and retain humility. You want to make it an easy decision for them to say yes to having a conversation with you.
There seems to be some negative feeling (arrogance and entitlement) associated with HBS MBAs in the start up community in particular and it’s our collective responsibility to try and quel that sentiment. My proposed approach is to be totally honest about your expectations and motivations for wanting to join the start-up and be flexible on compensation, equity and your job title. I think it’s really important to emphasize (and actually believe) that you are motivated by the same things as your potential colleagues and being honest and flexible upfront is the way to understand your compatibility as quickly as possible.
In general, I try and think about things from the eyes of the person receiving your message….
An important part of a Venture Capitalist’s job is to help recruit talent for his/her portfolio companies. I think you should make it as easy as possible for them to forward your application over to their CEOs. These guys are often busy and do a lot of work from their mobile devices – if your story is compelling and your credentials look good, I don’t see why they would not send your message to their portfolio companies.
A couple of guidelines that I use (in chronological order):
- Introduce yourself clearly and highlight your current situation (when you graduate) in the first line
- State which particular companies in their portfolio you are interested in
- Articulate what you would like to do/what skills you bring based on some sort of expertise
- Identify why these skills/expertise would be important for the portfolio company
- Show that although you have a value proposition you are willing to be flexible
- Ask to speak with the VC – they will most often not have time but are awesome people to get advice from
I think the same principles apply to when you are approaching a venture directly, but I try and talk a little bit more about why I like the product/company. Founders/CEOs are pretty emotionally attached to their products and it’s always nice for them to receive positive feedback from their users.
I am of the opinion that no conversation with a smart, successful person in a field that you are interested is a wasted conversation and each one will help you understand a little more about what you want and perhaps open up new opportunities – you never know!!
I’ve had reasonable but not exceptional success with this approach so would love to get other peoples’ thoughts – would be good to share the collective wisdom.
Like many MBAs out there, I’m looking to work for a start up when I graduate in June – a recent survey showed that appox 15% of our 2010 HBS class feels the same. I really like new/innovative technology and the internet and so I’ve narrowed my search to that area with a focus on the Bay Area.
I wanted to share my approach to finding start-ups with the rest of you. In my opinion, it’s really similar to being a Venture Capitalist for yourself with a couple of adjustments depending on your goals and personal risk tolerance.
If you don’t have a background in technology, it probably makes sense to work for a bigger start up (with a solid brand) to give yourself a bit more legitimacy in the market. I think there are loads of solid opportunities out there and I’m also looking at these companies. Some examples of the size of companies I’m taking about are Gilt, Linkedin, Zynga and Facebook. These guys are pretty well-established but still pre-exit and are low risk, in my opinion, but with great people and learning opportunities.
My general approach for finding smaller start-ups is something Ben Holmes
(Partner at Index Ventures who sat on the Playfish Board) taught me this summer and he writes about it on his blog.
- Market – Is the market big enough ($1Bn+) and can you see this venture being a leading player (with 10%+ mkt share) in the next 3-5 years?
- Technology – has the company got a differentiated product/technology?
- Team – has the company got an exceptional and complementary team?
- Traction – has the company got positive user and/or revenue traction for their product?
Ben’s philosophy, and something that I’ve tried to apply when thinking about ventures, is to find companies which are exceptional (A++) in one or more category, not companies that are a ‘B+’ in every category.
I keep a prioritized list of these companies and try and find ways that I could be connected to the management team through my network. If there is no connection, then I will often email the VC on the board or the management team directly.
There are a couple of things that I think are also important when making your choices:
- ‘Go where you want to live’ Joe Lassiter told me that in a meeting I had with him last semester – it’s important to start building a network at a local level
- Understand what the advantages and disadvantages of joining a small vs. bigger company:
- Small company – IF you build a great product and company from a small scale and have a successful exit I think you build a lot of credibility and it’ll be easier to be a co-founder in your next venture
- Bigger company – you get the advantage of good branding and learning a specific set of skills from people who know what they are doing
- Try and be as flexible as possible on your salary, equity, and job title if it’s a company and product that you are really passionate about – I figure all that stuff will come if you do a really good job
I will write again in the next couple of days about how I think about approaching companies and VCs.
Thanks for reading!