Breaking into VC as an Engineer
Inspiration for Venture
Since I transitioned to VC, I’ve been asked by a number of my engineering friends and colleagues how (and why) I broke into a seemingly opaque world of venture. I was drawn to VC because I was excited to work with the brightest founders in their respective fields, and to have a front-row seat to glimpse the future.
At first glance, venture capital seems to have an inherent predisposition to Kevin Zhangs (see Kevin Zhang @ Upfront, Kevin Zhang @ Bain Capital, Kevin Zhang @ GSV, and myself). While this hypothesis may be true, I wanted to specifically explore how an engineer might make the move to VC directly from a technical role.
Surveying the Landscape
Once I decided to explore venture capital, I wanted to first understand how other early-stage investors transitioned to VC. I’ll highlight some of the more typical paths below:
Operator/Founder -> Exit -> VC
Investment Banking/Private Equity → MBA (optional) → VC
Consulting → MBA (optional) → VC
Engineering → PM → VC
PhD (e.g. deep-tech investments) → VC
The former engineers who did become investors usually had stints in product management - there simply weren’t a ton of priors for engineers who were able to make the shift directly. I figured though that if Yoon Se-ri could crash land into Captain Ri Jeong-hyeok, an engineer like myself had a decent shot at venture capital.
Laying the Groundwork
A good portion of early-stage investors whose profiles I studied had considerable strategy and finance experience. While I was capable of building DCF models and could crank out analysis using the MECE framework, I was far more comfortable working with generics in Kotlin. I realized that to provide a truly differentiated edge and value-add to a venture firm and its portfolio companies, I needed to focus on early-stage funds where the evaluation of technology, and the teams behind the products, trumps Excel acumen.
I decided to take a multi-pronged approach to honing my existing strengths while improving on areas where I didn’t have as much exposure to. I split my time across three efforts:
1. Gaining as much engineering/product experience as I can at my current role
2. Becoming a knowledge sponge
3. Being deliberate about networking, and eventually, angel investing
Ultimately, due to the limited number of roles available in venture capital, there is quite a bit of serendipity involved. I did believe that if I put myself in a position to succeed, when the right opportunity presented itself, I could successfully execute my career pivot.
Leaning into my experiences as an engineer
During my time at Salesforce, I focused on developing sufficient engineering and product breadth. I had the privilege of building three vastly different products across industrial automation, machine learning, and the future of work. These experiences have been invaluable, and are now one of the foundational pillars that I lean into on a daily basis as I look at early-stage companies.
For example, my time at Salesforce Research gave me the chance to dive into the weeds of what goes into building an enterprise-ready voice assistant. Even beyond the ASR and NLU models that our research team had built, there were a ton of other open questions to answer as we iterated on our product, like the data models we needed to build to model each voice interaction, or the integration points we needed to build to interact with Salesforce (and the associated scalability, security, logging infrastructure that needed to be implemented).
Or, during my time at Quip, encountering various challenges as I worked on some of our Android apps. Whether it was developing chat functionality or resolving autocomplete queries when a user types “@” on the Quip document surface, I was able to build domain knowledge around mobile and be cognizant of things like different UI considerations or debouncing button clicks (something I didn’t need to worry about in backend engineering land).
Through these experiences, I managed to develop enough intuition to ask the right questions when evaluating tech-heavy startups. For specific investment areas, like developer tooling, I can even look at the product from a user perspective—did I have this pain point as an engineer, and what solutions are my engineering friends from other companies currently using?
Becoming a learning machine
From speaking to folks that I respected in VC, I learned that the nature of investing is extremely multifaceted, and that being a T-shaped investor is no longer enough. I needed to gain deep domain knowledge in more than one area and familiarity & insight in additional adjacent verticals.
I focused on developing perspectives across multiple topics and levels of abstraction. I knew that I had to be just as comfortable understanding how the unbundling of Excel has led to companies like Airtable or China’s race for semiconductor independence as I was at reading academic literature on the impact of Transformers on NLP or how Facebook reduces pointer indirection through Haystack. I drew my readings across Substack/Medium, engineering blogs, arXiv, and other research that I could get my hands on.
I also consumed as much open information about VC as I could. Books like Venture Deals have done a fantastic job of peeling back the veil of opacity around venture capital. There are also plenty of resources online. I’ll list a few interesting resources to get folks started:
Nikhil’s Substack article on the evolution of venture capital firms across agglomerators and specialists
My colleague’s excellent article on VC portfolio construction and how each investment needs to return the fund
Sequoia Capital’s YouTube investment memo
Sequoia's Black Swan memo at the onset of Covid
BVP’s investment memos for legendary companies like LinkedIn, Yelp, and Shopify
A smattering of articles that highlight how different VC firms might think about their investment decision processes:
I would also subscribe to a number of newsletters (Strictly VC, Axios, etc.). Spending time everyday learning what deals are funded, at what stage, trained me to spot trends — for example the current prevalence of e-commerce roll-ups or the investor appetite for financial SaaS products for SMBs. I would also create my own spreadsheet of companies that I thought were interesting, and why. This allowed me to evaluate my own intuition (when companies achieve subsequent funding).
All in, I spent around ~2 hours per weekday and 5+ hours on the weekends reading a mixture of specific deep dives and staying current.
Networking, hustle, and a bit of serendipity
Because I worked at a large public company, I knew that I had to be proactive and deliberate in expanding my network to the startup scene. I attended as many startup/VC/accelerator events as I could. Throughout this process, I not only built a great network that has helped me with deal flow (arguably one of the most important things that VCs look for) and technical expertise, but was also able to develop incredibly close friendships. One of the more valuable communities for me has been the CMU Tech and Entrepreneurship community (disclosure: I’m a board member there), where volunteers put together amazing events and communities around specific interests, like Machine Learning and Fintech. Many other universities have similarly strong communities so definitely take advantage of the available alumni resources!
I also began angel investing through my friends’ angel syndicates. This allowed me to gain more experience conducting due diligence in situations where my personal capital was at risk. I would write short investment memos to get due diligence reps in, and come interview time, bring a certain level of sophistication in my analysis that I couldn’t have developed working my day job.
On a more operational note, I wanted to highlight some resources & newsletters that actually list VC roles, as these roles usually don’t find their way to popular job boards. This is where the networking comes in — applicants are significantly more likely to win initial interviews if they are referred through a warm intro through a fellow VC or founder. Please note that these resources change pretty frequently so it’s important to keep a pulse on what the latest newsletters are.
Unfortunately, the number of investors doesn’t scale linearly with assets under management, so it’s important to stay patient as there are significantly more qualified candidates than open roles. My own transition into VC has been full of twists and turns and a lot of no’s. I had to continually iterate and improve my aforementioned “pillars” while dealing with the unpredictability of VC recruiting (venture firms don’t typically have a defined recruiting cycle so it could be months in between where there is no interview activity). Ultimately, I landed my first venture role through my extended CMU network (shoutout to Dave Mawhinney!), and I am enormously grateful for the wonderful folks who took a chance on me.
The journey ahead
While my VC adventures have just begun, I’m cognizant that I’ve been incredibly fortunate to have investor and founder friends who were able to guide me through my journey into investing, and am eager to pay it forward. I’m happy to connect to folks who might be curious about VC and share stories! Please don’t hesitate to reach out on LinkedIn or Twitter!
I wanted to give special thanks to Homan Yeun, Will Lee, Kishan Patel, and David O. on the edits!
It's truly an article detailing how you transitioned into the VC role man. Thanks for listing out all the resources and books out there and offering to help when I initially reached out!