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  • #18 - How to source interesting startups for a VC interview? & Map out the landscape of VC archetypes: Advice From a16z

#18 - How to source interesting startups for a VC interview? & Map out the landscape of VC archetypes: Advice From a16z

Sourcing startup deals for VC interview & Advice From a16z, Lowercarbon, Overwater Ventures

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VC Crafters
August 24, 2024

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👋 Hey there! Welcome to Saturday's edition of this week's Break Into VC Newsletter. We've got a packed issue focusing on everything you need to break into venture capital.

  • Deep Dive On How to source interesting startups for a VC interview?

  • Today’s Tips From VC Professional Map out the landscape of VC archetypes: Advice from a16z, Lower-carbon Capital & Overwater Venture VC Professionals..

  • Upcoming Global Online and In Person VC Events

  • Must Read Articles on Startups, Tech & Venture Capital

  • 40+ Venture Capital Job Opportunities.

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DEEP DIVE

How to source interesting startups for a VC interview?

In selecting a startup to talk about for your interview, it’s important to pick the right startup, not just any startup. Not only should you be able to craft a compelling pitch for why the startup is a good financial investment, but you’ll get brownie points for picking a startup that resonates with your own story. At the end of the day, VCs want to hire you.

Case Study

Startup A: builds drag and drop programming

Why I pitched this:

  1. am bullish about the low code, no code space and could convey my genuine interest and excitement for this space. I could bring in comparable to show that this is a real need, potential exit opportunities. I was able to be pretty specific and allude to relevant numbers too.

  2. It expands the market of potential users past people with software backgrounds, giving me the opportunity to tie in my professional experience at Big Tech. Having founded a company. I have been the target customer before and I have first-hand experience that this is a real need that users would be willing to pay for.

  3. It aligns with my personal mission of democratizing technology and entrepreneurship, also connected with my volunteer work and extra-curricular leadership experience.

Do:

  • Pick a startup that you embed yourself into the why

  • What industry/problem are you most passionate about? Pick a startup in an area that you are an expert in. It can be a niche! It’s more important that you pick an example you can back up, rather than the “hottest” startup.

Don’t:

  • Pick a startup that the firm has invested in. Save that as an answer to the question: which of our portfolio companies would you have (not) invested in and why?

  • Pick a startup that’s a direct competitor to one of the firm’s portfolio companies because they probably have more insight into the space than you do ;)

The Verdict is Still Out… Do you Pick a company that would fit in the firm’s investment thesis

  • Pro: It shows that you have done your research

  • Con: They have probably also done a lot of research in this space and may have even considered/passed up/lost this company

  • It’s more important that you have the right thought process and are bringing in a convincing and unique proposal in an area that you are an expert in. So, don’t sweat this criterion too much.

How to find startups

Let’s take a breadth-first approach in finding relevant startups. What to look for (criteria mentioned above) is for you to decide, but here are a few tips for putting an initial list together

Curated Lists

Someone did a lot of research on the “best” startups to work for. Obviously, one should check the criteria of analysis and any biases the researcher may have had. Also you can simply search on google top pre-seed startups in particular sector. You will find tons of startup, pick up one of the startup.

You can also check the list by LinkedIn.

  • LinkedIn Top 50 Startups (2023)

Venture Capital Firms

Finding a startup through a Venture Capital Firm offers yet another layer of vetting. There are two ways in which you can connect with startups via their investors.

Portfolio Companies

Though it’s time-consuming, I recommend going through the portfolio companies of the leading VC firms to start. These companies are vetted, but less novel finds. Think about the stage of the VC you are interviewing at, and look at portfolio companies of a VC that invests at a slightly earlier stage.

  • Accel

  • Andreesen Horowitz

  • Battery

  • Benchmark

  • Bessemer

  • CRV

  • First Round

  • Founders Fund

  • General Catalyst

  • GGV Capital

  • IVP

  • KPCB

  • Lightspeed

  • NEA

  • Sequoia

If you’re looking to for Student Founded Companies, check out:

If you’re looking for Biotech, check out:

  • Arch Venture Partners

  • Third Rock Ventures

  • Venrock Ventures

  • Polaris Partners

  • 5am Ventures

If you’re looking for female-owned and backed companies:

  • Female Founders Fund

If you’re looking for companies aligned with big-tech, check out corporate VCs such as:

  • Google Ventures

  • Intel Capital

  • M12

  • Merck

  • Salesforce Ventures

If you’re for Chinese companies:

  • Baidu Ventures

  • TenCent Ventures

Top Accelerators

If you’re looking for a smaller startup, reach out to companies in recent batches. If you’re looking for a more mature startup, look them up on Crunchbase to see how much they have raised and from who.

  • Y-Combinator

    • If you’re looking for a mature company, check out their “Top Companies List” (2023)

    • If you’re looking for a smaller startup, reach out to companies in recent batches (running list).

  • Techstars

  • 500 Startups

  • Plug and Play

  • MassChallenge

  • New Lab

Your Network

I do think leveraging your network (if you took a shot for every buzz word I used in this article, you wouldn’t make it past page 2) can be super helpful in finding a solid startup. I would suggest:

  • Take a moment to think. Seriously! Who do you know who is at a startup right now? Do they like what they are doing? Do they vibe with company culture? Do they see the company succeeding?

  • Use the handy Linkedin or Facebook search bar. Where is your role model, #womencrushwednesday, or #mancrushmonday working?

  • Scroll through social media (LinkedIn, Twitter, Instagram, Facebook). Who just posted or updated their bio to be “We’re hiring”? Who just joined a startup that they are stoked about?

Be a Bookworm

Read the top sources for tech news and keep an eye out for high-growth companies. Check out our Understanding the Market section in Part II.

Other Helpful Resources

  • Accelerated Newsletter

  • Angel Groups

  • AngelList

  • Attend startup events on Meetup and Eventbrite

  • Handshake (for general recruiting)

  • Jumpstart (for recruiting at mission-driven companies)

  • Startuphire

  • Venture For America

  • VentureLoop

That’ it.

We have created a all in one VC Interview guide - question (how to answer them). All these questions and answers are curated from leading VC Partners….

You can access our compressive interview guide here………… (Download the pdf)

TODAY’S TIPS FROM VC PROFESSIONAL

Map out the landscape of VC archetypes

Mapping out the core “jobs to be done” as a VC is a useful starting point for thinking about how to position yourself within it.

Nikhil Basu Trivedi, General Partner at Footwork, sums up the role of a venture capitalist perfectly in his daily mantra: Find, Decide, Win, Help, Exit. 

These five parts of the job were first explained to Nikhil by his mentor at Shasta Ventures, Tod Francis, through a simple flowchart which Nikhil penned on a Virgin America napkin during a cross-country flight in 2014. 

Source: The Venture Capital Flowchart by Nikhil Basu Trivedi

The flowchart provides a framework for thinking about the role of a venture capitalist as five distinct functions:

  1. Find: Finding the best companies to invest in

  2. Decide: Deciding which companies to invest in, given the firm’s investment strategy

  3. Win: Winning deals by being a preferred choice for founders

  4. Help: Helping companies succeed by supporting them post-investment

  5. Exit: Navigating towards a great exit, maximizing return on investment

While there is no one-size-fits-all path to a career in VC (more on that later), we can use Nikhil’s flowchart to generate three key archetypes, based on which of the five core VC functions they perform.

How Shawn Xu (Lowercarbon Capital) positioned himself as a Networker 

“For me, I leaned into my work with student entrepreneurs (‘I have a point of view on who the strongest founders/engineers/designers are at the top schools in America’) to score my first internship in venture.”

— Shawn Xu, Lowercarbon Capital, in an article originally published on Startup Grind

How Seema Amble (a16z) positioned herself as an Analyst

“I was first exposed to fintech when I started looking at financial services companies 15 years ago through the lens of private equity investing.  I couldn't help but think there must be new, more modern ways to build these companies – and a more fun way to invest. Over time, I moved earlier – it's a lot more fun to be working with early-stage founders than it is to be sitting on quality of earnings due diligence calls!”

— Seema Amble, a16z

How Kristina Simmons (Overwater Ventures) leveraged her operational experience 

“I felt like the best investors have been in the seat of an entrepreneur. I experienced the 50-2,700 people growth stage at lululemon, and then I went the startup route after a16z to experience what it was like to launch something from scratch.

My operational experience made me a 1,000x better investor. Having seen and experienced different stages of building made it much better to give strategic advice to a founder. The best way into VC is to do interesting things on the building side first.”

— Kristina Simmons, Overwater Ventures

DON’T FORGET

How Can People From Tech Background Break Into VC? (Highly Recommend)

Check out SWE2VC article’s - it’s written by VC Professionals where he shared insights on how people from tech background can make career in VC.

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VC CRAFTER’S PICKS

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  • Building an Investment Thesis By HBS VC Pathway (Watch Here)

  • Lessons from 32 Years of Fund Investing - Why Exits Will Be Larger (Watch Here)

  • What does it mean when VCS say a startup is not scalable? (Read Here)

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