Information on Venture Capitalists
Sometimes described as legalized gambling, a career in venture capital requires strong business sense. As an investor, a venture capitalist is approached by entrepreneurs and small companies needing money to help their ideas become successful businesses. In the event the company does thrive, the venture capitalist will see the initial money back as well as interest or a percentage of any future profits. However, sometimes a business fails, and the venture capitalist is left with a loss.
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Education
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A college diploma from a top business school is all but required in becoming a venture capitalist, and many have MBAs as well. Furthermore, most venture capital firms are looking to hire candidates with relevant experience, so having some background in technology or banking is important.
Responsibilities
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When employed as a venture capitalist, reading newspapers and remaining current on emerging technologies and companies that may be seeking investors is part of the job. A significant amount of time is spent meeting with entrepreneurs and reading business plans, researching the specifics of a plan to see if a particular business idea is a viable investment option. Networking is a crucial part of the job as well as good communication with others.
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Positions
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Although venture capital firms tend to differ in structure, there are some commonalities in the roles their employees perform. General partners are the most senior staff, making decisions about which investments are to be made as well as raising money for the company. Junior partners are usually expected to become general partners at some point and are responsible for lesser duties. Vice presidents or associates, usually experienced in business, review business plans and meet with entrepreneurs. Finally, analysts are required to look over business plans and do research on potential investments before handing them over to senior employees.
Advantages
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A career in venture capital can be very rewarding because it involves the ability to help ideas grow into successful businesses. There is opportunity to work with interesting people and cutting-edge innovations, and even in lean times, the pay is quite high. Furthermore, a venture capitalist has the ability to see how industries and technologies change while overseeing the growth of fledgling companies.
Disadvantages
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Although salary can be a strong draw to the world of venture capital, it can be a detraction as well. With a stake in whether their firm does well, venture capitalists can experience personal losses or layoffs in tough times. Another difficult part of the job is rejecting so many proposals, thus disappointing many people. Additionally, the relationship with entrepreneurs can become strained, as venture capitalists are often accused of putting money first and using their power to change companies.
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References
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