I received my best professional break with the Kauffman Fellowship. It was early 2003 when I was a budding but anxious venture capitalist. Then, as now, the industry was in contraction and VCs were concerned about industry overhang, bloated portfolios, and stagnating economy. Had I not been invited by VIMAC Ventures to join its team as a Kauffman Fellow, it is unlikely my career as a venture capitalist would have survived the tumultuous years that followed.
As it is, finding an entry level position in the VC industry is tough. In an earlier blog, ( You the Venture Capitalist ? I cautioned those targeting a VC career that it should be treated as a long term project that offers scant success. As the industry shrinks from about a 1,000 firms to about 600 today, entry level positions are declining. Firms hire irregularly and almost never through campus interviews or career offices. When firms do hire someone as Analysts or Associates, they often expect ask them to leave after two-year tenures. As a result, the proportion of Associates that get on the partnership tracks is relatively small.
Consider the Kauffman Fellowship (www.kauffmanfellows.org) program.
Fellowship:The fellowship is perhaps the best qualification you can obtain to gain entry and ensure long-term success in the venture industry.
Each year, the Center for Venture Education (CVE) picks over 20 Kauffman Fellows who will spend two years with an IT, Biotech and Cleantech firm as an Associate (occasionally senior roles as well). In addition to the performing their regular role at the firm, the fellow will follow a detailed training regimen that consists of several modules every couple of months. These modules bring the entire class face-to-face with some of the most successful investors, entrepreneurs and industry professionals, and also teach them the ropes of the industry through case studies, role plays, team assignments, and class lectures. The fellows build a strong relationships that help them learn best industry practices, develop innovative ideas and source deals that will make them successful investors in the long run.
Mentorship: Each fellow is also assigned a mentor, typically a senior partner at her firm. The CVE takes the program rather seriously and enforces a strict code of mentorship. Mark Robinson, my mentor, had to set periodic professionals targets and share my progress with the CVE staff every quarter. The CVE expects the mentor to assume the responsibility for ensuring mentee’s success in the industry – a unique privilege for any new inductee in any profession. The bottomline is that the Kauffman Fellows end up as blue-eyed trainees who are expected to provide future leadership to their firms.
Competitive: Not surprisingly, the Kauffman selection process is extremely competitive. The candidates go through a three-stage selection process and one final visit with the venture firm before they get hired. Even though the class size has grown from 5-10 to 20-25 now, the number of fresh hires remains as low as 5 who are selected from an applicant pool of several hundred. The rest of the class consists of existing industry professionals who have been sponsored by their firms (and selected by CVE) to undergo the fellowship. In all cases, the venture firms pay a substantial ‘tuition fee’ to the CVE, hence the selected candidates go through a fairly severe scrutiny by the firms as well. The competition is also increasing with increasing internationalization of the program. Now, the fellowship links over 400 industry professionals in six continents.
Unique: It is worth emphasizing that this is the only formalized VC training available anywhere in the world. No other firm or institution teaches the art and science of venture capital, and new professionals are just expected to absorb skills as they go along. This lack of training is particularly disconcerting in the venture industry where people come in from a variety of different backgrounds but are expected to contribute a diverse set of skills that span technology, team building, entrepreneurship, financial acumen, salesmanship, company building, negotiation, marketing, business judgment, economic trend analysis, and so on. Though not every skill can be taught, Kauffman Fellows usually develop an edge in this challenging profession. This can be seen both from the high success rate of the Kauffman alumni in the industry, as also the number of new venture firms successfully established by the alumni. Personally, I’ve benefited immensely from the advice and support that several senior alumni offered during the process of founding WAVE.
Positioning for Success: Though there is no success formula, a few trends are visible. Increasingly, specialists are being favored over generalists. WAVE is a cleantech firm so we will obviously look for specific industry skills. But even generalist firms now tend to have industry-specific teams. Many firms prefer resumes that have international work credentials, entrepreneurial gigs, relationships with industry leading firms, and a mix of business and technology skills. But VC industry is the ultimate ‘black swan’ industry, and sometimes fellows come in with very tangential experiences. Majority of my experience, for example, consisted of working for the uniformed services, the government and the United Nations. Being people and tech savvy is important, but any generalization beyond that is risky.
So, what can I advise future applicants? I’d urge anybody considering a venture career to give this program a serious consideration. It’s a legitimate door to the industry, and a privileged one at that. Though only a few will succeed, the process itself provides an intense learning experience that helps people understand the industry dynamics and allows them to judge their professional fit. It can also open doors later on. CVE puts together a resume book of all finalists and reaches member firms who may have hiring needs. As a result, several finalists have found positions at well respected firms well after the conclusion of their Kauffman interviews.