I told Harvard MBAs to Angel Invest to get into VC. Here’s Why. Part 1

TL;DR: Start angel investing to get into venture capital.

This article is written by Hassan Akram, the CEO of City Careers Coach. We help students enter the world’s most elite finance careers through our experience as elite finance recruiters. Hassan has spoken at Harvard, MIT, and Yale on this and writes in the Times of India on getting into elite careers. He’s recruited for elite corporate careers, including investment banks, corporate law firms, and venture capital funds. He has also interviewed 1,000+ professionals from Goldman Sachs, Kirkland & Ellis, and McKinsey. 100% of our clients are successful at the CV stage. 95% secure at least one corporate career. Our highest client starting salary is $180,000 at 21. We have an in-depth understanding of passing recruitment processes for elite, high-paying, and prestigious finance careers.

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Check our case studies of clients securing offers. Here’s Dhruv who secured multiple offers at investment banks and a hedge fund, Aryan who secured an offer at an investment bank, and a client who requested to stay anonymous client at a boutique investment bank in the M&A division.

INTRODUCTION

The key point of this article is this: you don’t have to work in venture capital to break into venture capital. It’s a strong statement, but it’s true. Venture capital is unique in this respect. For roles in private equity, candidates must be able to complete leveraged buyout models to successfully pass the recruitment process for a fund. Likewise, with corporate law, a regulated industry, candidates must complete a period of legal education, such as the Bar exam in the US or a legal training contract in the UK. Without this training, a career in corporate law is impossible.

Venture capital, however, is fundamentally different. There are no prior professional, regulatory, or technical requirements or prerequisites. As a firm, we’ve heard of real estate agents, sales agents, and even individuals from bookstores in the UK, such as Waterstones, get into venture capital. You also don’t have to attend Harvard Business School or Wharton Business School to get into these fields. We have seen people enter venture capital despite having attended ‘lower-ranked universities’ and, in some cases, not attending university at all.

This article will be part of a series of articles based on my lecture at Harvard Business School outlining how to get into venture capital and how to boost one’s profile for it.

ANGEL INVESTING

One of the most effective mechanisms to develop a profile and position yourself to enter venture capital is to angel invest. This is an easy activity to complete given the plethora of startups, and often developed startup infrastructure, around universities, MBA schools, and major financial centers. A clear and actionable point here could be to attend university incubator programs and speak to founders or reach out and contact founders from Crunchbase or AngelList.

A key point to make here is that the ticket size of your investment is actually irrelevant. It could be as little as ￡10. The most important thing is being able to say that you are an active angel investor who looks to identify potentially high-growth companies.

A key benefit of angel investing is that it is accessible and generally low-risk financially. Even if your angel investment fails, it provides a fantastic opportunity to discuss with recruiters and venture capital associates what you learned from it during a recruitment process. Most early-stage startups actively need capital to invest in the infrastructure and systems of their ventures, such as product development for a SAAS-based product. Simply put, an early-stage startup is unlikely to say no to angel investment in most instances.

Furthermore, in the process of making these investments, you are likely to develop a network within the startup space which will undoubtedly prove positive later on in your journey to get into VC, (as a later article in this series will show.)

From a personal development perspective for a long-term career in venture capital, angel investing is also invaluable. It provides first-hand understanding of the startup ecosystem and enables you to understand how startups develop from ideation phase to growth, success, and overcoming multiple challenges at an initial stage such as finding product-market fit. This experience offers greater insights than what can be learned from articles on Crunchbase, the Financial Times, and other publications.

In short, from a long-term investor perspective, we would say becoming an angel investor is vital. It will allow you to see the inner workings of the startup world, gain a deeper understanding of how they are run, and what it takes for them to succeed.

With this in mind, as you look to angel invest, you are likely to gain exposure to a variety of startups, industries, and sub-sectors, ranging from Fem-tech and Fin-tech to consumer SAAS. As mentioned earlier, this will benefit you as a potential venture capital investor.

This exposure will allow you to identify trends and patterns, understand different business models, and recognize investment opportunities that you may not have otherwise been aware of. With this knowledge, as an angel investor, you will also be able to position yourself as someone who can make informed investment decisions and, therefore, identify opportunities for venture capital investment.

Moreover, angel investment will enable you to develop your investment and strategic acumen — two traits highly valued by top VC funds such as Sequoia and Accel. As an angel investor, you often have the option to provide clear strategic guidance and support to founders and founding teams in multiple areas. This could include the startup’s go-to-market strategy, current business model, or current and proposed growth channels. The direct insight and guidance you provide will also closely emulate the role of a venture capital associate, as a significant part of their job involves providing strategic business counsel and support to founders.

Lastly, from the perspective of a recruiter or current venture capital professional who may interview you as part of the recruitment process, undertaking angel investments can be impressive. It shows that you are comfortable with taking risks and making significant investments in early-stage startups that you believe have the potential to excel. This is similar to venture capital firms, which also invest in startups that have typically secured angel funding, in order to support their growth and development.

To sum up, as a former venture capital recruiter, angel investment is a positive indication and a valuable data point when evaluating candidates, particularly in a competitive sector like venture capital where we often receive 500+ applications for a single role.

Even if you don’t achieve success in securing venture capital through angel investing in multiple companies, there’s still an opportunity to become a highly successful angel investor and build a vast network in the startup space.

And that’s really not a bad backup option, is it?

CONCLUSION

Angel investing is a crucial step in laying the foundation to become a venture capital investor. We recommend actively seeking out angel investment opportunities.

Please visit our blog on The Times of India for guidance on entering elite careers: https://timesofindia.indiatimes.com/blogs/author/hassan-akram/

Check our case studies of clients securing offers. Here’s Dhruv who secured multiple offers at investment banks and a hedge fund, Aryan who secured an offer at an investment bank, and a client who requested to stay anonymous client at a boutique investment bank in the M&A division.

ABOUT US

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‘Really clear and structured frameworks. Genuinely world-leading. I’m a former private equity investor and was impressed by the depth of their knowledge for elite careers, such as private equity and venture capital. Can’t wait for them to come to HBS again.’

‘I honestly had never heard about City Careers Coach. But they honestly blew me away with the truly personalised nature of the programmes. I got spring weeks at investment banks, hedge funds, and I secured experience at a PE fund. I have a summer internship at an investment bank coming (BNP Paribas). I’m fairly confident I’ll convert this to a full-time offer through the firm’s internship conversion programme.’

‘City Careers Coach was incredibly helpful in my CV recruitment process. I had gathered useful pieces of recruitment information from various sources prior to meeting Hassan, but he was able to bring it all together to help me have a clear picture of what a good recruitment strategy looks like. Beyond being extremely knowledgeable, Hassan, the firm’s CEO, was incredibly flexible, friendly, and willing to help out in any way — I would highly recommend Hassan to anyone looking to break into elite finance careers.’

City Careers Coach is an international network of freelance finance recruiters. We are from investment banking, corporate law and private equity backgrounds. We provide premium, bespoke and personalised 1–1 career development programmes. These are for university students looking to enter elite corporate high-paying careers. We have an exceptionally strong track record. 100% of our clients pass CV stage. 95% of our clients secure at least one internship or graduate role. And our highest client starting salary is ￡150,000.

Click here to join 350+ students from Oxford, LSE, Stanford in our FREE Skool Community on entering elite careers

Check our case studies of clients securing offers. Here’s Dhruv who secured multiple offers at investment banks and a hedge fund, Aryan who secured an offer at an investment bank, and a client who requested to stay anonymous client at a boutique investment bank in the M&A division.

Please visit our blog on The Times of India for guidance on entering elite careers: https://timesofindia.indiatimes.com/blogs/author/hassan-akram/