We are the Champions
Let's set the record straight on junior VC members
I must seem like a broken record at this point - beginning all of my posts with a caveat of my biases. Indeed this may be redundant as this is a personal blog and most readers understand at the outset of the article that they are reading my personal opinion. Alas, I would be remiss were I not to mention that what follows is heavily influenced by my personal experiences.
The VC Totem Pole
For founders, both new and seasoned, navigating the various personas at a VC firm can be more challenging than it ought to be. There are several different titles, all possessing various responsibilities and implications, some of which may not be obvious to “outsiders”. Before I dive in to some of the intricacies, here is a (very) basic outline of the VC totem pole.
The above is not an exhaustive list, but it does provide a basic framework for understanding the hierarchy at a venture firm.
Analysts are typically young and in the first few years in the workforce. They are often the “first level of defense” for funds’ filtering process and help with the due diligence of new opportunities
Associates are either veteran analysts or analysts with an MBA. In funds that don’t have analysts, they serve the same function but typically have a higher level of involvement in the investment decision process
VP/Principals are more experienced individuals that have either significant prior experience in VC or in a translatable field (entrepreneurship, investment banking, product management, consulting). Some firms have both of these titles as separate positions, and some firms have only one of them. Some VPs or Principals may have the ability to lead their own investments
Partners are decision makers who can lead their own investments. Venture Partners are often times “partners in training” or partners in a trial phase
Managing/General Partners are the most senior of the partners, and are usually the actual decision makers
Of course, there are significant nuances that go into this. Firstly, not all funds have each of these positions filled. Whether by choice or by happenstance, many funds suffice with only a few investment team members. Secondly, VC titles cannot always be compared apples to apples. For example, an analyst at one fund may have more responsibility than a principal at another. Similarly a principal at one firm, may have more decision making abilities than, say, a venture partner at another. Thirdly, there are countless other titles including: senior associate (a way for managing partners to delay a pay bump for experienced associates), EIR (usually entrepreneur in residence, but recently can also refer to engineer in residence), Director (a title that makes principals feel more senior than they actually are) and so on and so forth.
The Plight of the Junior VC
So why did I go through all of this?
I’ve noticed that many founders lack appreciation for junior VC members. When I say “junior”, I’m referring to anyone below Partner level, and when I say “lack appreciation”, I’m referring to an odd phenomenon in which entrepreneurs approach interactions with said junior VCs much as they approach Covid-19 - best to be socially distanced. This manifests itself in multiple ways: not responding to outreach, answering politely but insisting on speaking to a partner before divulging any information, disregarding opinions, and more. But before diving into the legitimacy of these actions, the real question is why this phenomenon exists in the first place? Here are a few theories:
Time Suck - There are definitely examples of junior VCs wasting founders’ time. I myself have done this, not purposely of course, on several occasions in my career. There simply are times in which an analyst/associate/principal spends weeks interacting with founders, only to abruptly cease interacting after said individual discovers that there’s no partner buy-in for the deal.
In more extreme scenarios, there are certain large institutional funds that have a swarm of analysts who reach out to hundreds of companies per month simply in order to collect data - with no real intention of starting an investment process (these calls should indeed be avoided).
Bad Branding - Perhaps as a reaction to the previous theory, junior VCs have a branding issue. There are both local and international funds who openly boast about not having any junior VC team members as if it is a badge of honor. In a similar vein, there are some firms who simply list all of their team members as “Partner” in an odd attempt to fool founders (btw, this reminds of me of the classic line from Syndrome in The Incredibles). There are even full twitter accounts dedicated to making fun of junior VCs (btw, this twitter account is hilarious and I love it). These actions perpetuate a perception that interactions with junior VCs are undesirable.
We Are the Champions
Perhaps I’m writing this post due to my own ego being hurt on several occasions, but despite the above I truly believe that junior VCs are an undervalued asset for founders.
Finding your champion: Much like any sales process, one of the best ways to close a deal efficiently is to have an internal “champion”. This individual is oftentimes the actual user of the product being sold, and may or may not have decision making power. But the champion serves as your person behind the scenes - the individual who is so bought in to your product, that they will do anything they can (evangelize, push meetings, get you in front of the right decision maker, etc…) in order to help close the deal. Analysts/associates/principals can fill exactly that function within a VC firm.
What founders should understand is that VC firms are small teams by default. As such, every voice within a firm bears weight. Partner’s make their own decisions, but those decisions are influenced, sometimes heavily, by the opinions of those around them. It would serve founders well to assure that those voices maintain an upbeat sentiment when it comes to their companies.
Play the long game: While the majority of junior VCs won’t ever make it to the top of the totem pole, some will. Taking a 30 minute call with someone today, may serve you very well in the future.
VC is, at its core, a mentorship driven industry. So it’s confounding to me that some firms do indeed boast about employing strictly partner level team members. Junior VCs are essential in ensuring the continuity of a fund and those that don’t put an emphasis on it may find themselves in a troubling position. (Israel has done a great job at destroying successful funds due to a lack of plans for succession).
Alignment on interest: Perhaps most importantly, junior VCs have the potential to be the most aligned with founders’ interests. One of the ways that young VCs stand out, both within their own firm and in the ecosystem, is their ability to source and close successful deals. Their success is tied to the success of the companies that they “back” early in their careers. Having someone on your side who will have that extra bit of hustle and incentive is always valuable.
Context is Key
As a founder, it’s 100% legitimate to want to spend your time with Partners. With that being said, I believe there are several good reasons to invest in relationships with junior VCs as well. The most important thing is to understand the context of the firm you are speaking to - how many investment team members there are, how long have they been working at the fund, does the fund have a history of empowering junior VCs or not, etc…
So next time you’re approached by your friendly neighborhood analyst, associate or principal, use it as an opportunity to gain a champion.