Venture Capital Series #1: A Snapshot

In this series, Wharton Women sheds light on a less-explored but fascinating industry and career path. This is the first article of a three-part series on Venture Capital.

As Penn students, we oftentimes feel overwhelmed with opportunities in the banking and consulting sectors. There is an indirect push to follow in the steps of recent graduates by earning the highest possible starting salaries and living in New York. The adventurous few might even consider marketing, government or technology jobs, but we often overlook the possibilities that lie outside these traditional career paths.

Venture Capital firms are dedicated to providing a form of financing to small, early-stage firms with high growth potential. In other words, it is a form of private equity. Their processes are focused on conducting due diligences, creating accelerator programs, sourcing investors, and selecting the right firms to invest in. However, beyond the technical aspects of VC, it is particularly interesting to consider the culture of innovation and creativity that reigns in the industry.

How VC Works

Since VCs are generally quite small and often focused on technology companies, every single employee plays a vital role in bringing new ideas to the table. Teams who evaluate investments need to be knowledgeable in finance, technology, and markets, but they also need to understand entrepreneurs and adapt startup ideas to the fund’s objectives. Two ideas about VC culture particularly attract our attention:

  1. It is adaptive. Instead of constantly reacting to events that happen in the markets and stock exchanges in the way that trading firms do, VC is all about adapting to emerging trends in technology. It requires predicting potential improvements and bridging the gap between now and the future.
  2. VC is open to iteration. In these firms, the development of a basic product that has sufficient features to satisfy early adopters (known as a Minimum Viable Product) is encouraged. Entrepreneurs are motivated to work on product-market fit first, and to perfect the product’s technology later.

In Venture Capital, there is a large number of failed ventures, yet the few that have successful exits overshadow the not-so-successful-ones. We therefore encourage you to explore VC culture and all it has to offer.

Some VCs firms we like (with Penn alums at all of them!):

 

Written by Eugenia Carmona Aristeguiet (W’ 20) and Margaux Carré (W’ 21).

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