PS#083: A Reference Guide for a Successful Internship (Part 1)
The summer is upon us, which means…
It’s internship season.
For those of you that have secured internships, it’s time to test yourself in the arena.
With that in mind, I wanted to help. Over the next few issues, I’m going to provide some goals, pieces of advice, and a collection of referenceable resources to help you have a successful internship.
For simplicity’s sake, I’ve broken it down into the following categories…
Sourcing
Evaluating & diligence
Investing
The venture capital internship can be an ambiguous and confusing experience (not too dissimilar from the recruiting process). This series should help set you up for success and (hopefully) bring some clarity to said experience.
Alright, let’s get started.
Goal: create a sustainable sourcing skill set in order to own the top of the funnel.
For almost all aspiring and new investors, your job will involve driving pipeline and filling the top of the funnel with quality opportunities.
Your goal should not just be adding to the top of the funnel, but learning how to own that part of the venture process.
Quality sourcing is foundational to being a successful, long-term venture investor. It’s something that needs to be honed, refined, and maintained throughout your career. To do this effectively, you’ll need to build processes that can be used over and over again.
Good news, your internship is a great place to start.
Take this time to start working on the 4 key aspects of building a successful, repeatable sourcing skill set…
1. Develop a method for building investment theses.
Most of you will be joining funds that already have an established investment mandate. With this mandate, there may be a predefined set of theses that the senior investors are chasing.
Even in these situations, it’s important to learn how to build and develop investment theses.
Use your internship to learn from existing investors on how they build their theses. Ask and observe the work they do, as they figure out where to dedicate their time. There are an overwhelming amount of trends, theses, and companies out there to chase. If you don’t have a clear plan, you’ll end up wasting a lot of time.
Once you have an understanding of how it’s done, break down the process. Figure out how you’d follow that process in a completely different space. What would you do first? How would you decide what opportunities to pursue? Etc.
Check out these resources (alongside learning on the job) to help build out this skill…
2. Understand the numbers and the mechanics.
After you’ve identified your investment thesis (or theses), it’s about filling the pipeline.
Now, before you jump into emailing companies and having first calls with founders, take a moment to understand the numbers and mechanics of a venture capital deal funnel.
Depending on your fund size, stage, and investment mandate, the numbers of your deal funnel may look different. Take a look at the resources linkedin below to start understanding how this process works. Review historical information from your fund to see what they’ve done in the past and what would be expected of you in the future. You’ll need to think through the number of leads, first calls, etc. that are needed to yield the targeted number of investments.
At the end of the day, this is a numbers game. Volume matters.
After you understand the target numbers, make sure you have a logistical plan of attack. This includes a plan for engaging with startups (e.g., first calls) and advancing them through your pipeline. I’ve seen way too many aspiring investors go into a call with a founder to just walk through the deck they received in advance. This time is valuable. Have a plan to get the most value out of the conversation as possible (for all parties).
Relevant resources include…
3. Build your network.
Alright, so at this point, we know where we are going to focus (i.e., our investment thesis), we’ve got our targets (i.e., number of leads, calls, investments, etc.), and we’ve got a logistical plan of attack. Now, it’s time to start building our network in these focus areas.
Over the course of your career, you will need to build out your network in all sorts of focus areas and across all sorts of investment mandates. It’s critical that you develop a process that can be easily (and quickly) replicated.
A trusted network will be a foundational piece of your success as an investor.
Good news – your seat in the game (aka, your internship) will give you a great starting point. You’ll be able to (more easily) network with VC investors and trade deal flow.
However, it’s important to remember that a strong network is more than just fellow VC investors. Make sure you are building relationships throughout the capital stack as well as with different stakeholders/ecosystem players in the area(s) of focus.
Check out the strategies I’ve used for building out your network (links below). I’ve also included a full playbook in my course How to be a VC Associate.
4. Set up your sourcing channels.
The final step in our stated goal is to set up these channels for repeatability.
There’s a whole bunch of ways to think about sourcing – inbound vs. outbound, proprietary vs. nonproprietary, etc. Over the course of my career, I’ve seen all of these strategies result in high quality deal flow (and eventually investments).
For this part of the goal, you want to develop your plan for making sure you hit each of your determined channels on a consistent basis. The cadence of each may depend on the strategy, but at the end of the day, consistency is what matters.
Sourcing is something that needs to happen over and over again, each and every day, for the entirety of your career. That’s how you stay top of mind within your network and maintain a flowing funnel of high quality deals.
Check out the strategies I’ve discussed below…
If you can use your internship to build the sourcing skill and set a proper foundation, you’ll increase your odds of finding a full-time role and succeeding in this industry.
