What type of person thrives in the Venture Capital industry according to a Climate Venture Fellow at an Early Stage VC Firm
Success in early-stage venture capital requires resilience, as "the success rate...is 5% if that," demanding the ability to learn from failures and persevere. A crucial element is empathy, understanding that investments impact "other humans" significantly, fostering responsible behavior for long-term success and strong deal flow; furthermore, natural curiosity is key to critically evaluating opportunities and identifying truly innovative solutions.
Resilience, Empathy, Curiosity, Humanity, Critical Thinking
Advizer Information
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Job Title
Company
Undergrad
Grad Programs
Majors
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Nick Rojas
Climate Venture Fellow
Early stage VC
UCLA
University of Michigan, Ross School of Business MBA, School for the Environment and Sustainability MS Sustainable Systems
Environmental & Related Sciences
Climate, Environment, Sustainability & Waste Management, Finance (Banking, Fintech, Investing)
Climate, Environment and Sustainability
Honors Student, Scholarship Recipient, Pell Grant Recipient, Took Out Loans, Worked 20+ Hours in School, Greek Life Member, LGBTQ, First Generation College Student
Video Highlights
1. Resilience: Successful VCs understand that failures are inevitable and develop the ability to learn from mistakes and move forward. The success rate in startups is low, so perseverance is key.
2. Empathy: Successful VCs remember that their investment decisions impact people's lives and livelihoods, emphasizing the importance of human connection and ethical considerations in their work.
3. Curiosity: The industry demands a constant questioning of existing systems and a drive to understand emerging technologies and business models. A natural curiosity and desire for learning are crucial for success.
Transcript
How would you describe people who typically thrive in this industry?
Folks who do well in early-stage VC are resilient. They recognize that even if you're the smartest person and work incredibly hard, you're going to make bad investments. You have to be able to forgive yourself, get over it, and move on to the next.
If you get down on yourself and think you're not smart or don't deserve to be there because of bad decisions, remember the success rates. For most startups, the success rate is 5% if that, and truly successful ones are 1-3%. We hear about the big names, but hundreds of thousands of others got funding and didn't make it. Not every investment will be great, so you have to stay strong.
Another important quality is empathy. While you are investing money and running a business, remember there are other humans on the other end. You're not just investing in someone who has everything and is doing this as a hobby. For many founders, this is their life's work; they've put their lives on hold and sacrificed so much. Family members may have stepped up with money or made sacrifices, and communities might have come together.
When you say yes or no to an investment, it impacts many people in a large way. Bringing empathy and humanity to your work is incredibly important. Good VCs remember this because deals are rarely one-time things. There's potential for repeats, and if you behave badly or don't treat people well, other founders and VCs will hear about it. This can hurt your deal flow down the road, so there's a huge economic incentive to behave well and treat others well.
Finally, a natural sense of curiosity is a huge key trait. Working in VC, you have to constantly question if you're doing things the best way possible. For example, is our current food system the best it can be, or could there be another way? You might hear about a company doing something differently and need to dig in to understand their approach.
Ask yourself if their idea truly makes sense or if it's just fluff. Do they have good research? You'll need to do your own research to see where their idea is going. Are other companies working on this? Is that good affirmation, or is there a reason they haven't pursued it? Perhaps they are onto something unique that no one else has thought of.
You need to be naturally curious to question things, understand how systems work, and consider if the current path is the best one forward. You need to determine if incremental improvements are sufficient or if a complete change is necessary. This curiosity and desire to learn are incredibly important.