Is it better to start my career in a VC firm or in a startup?

This article is intended for students who are hesitating between a first job in a VC firm or in a startup.

One of the questions I get to discuss the most with people interested in participating in a memoHub batch is whether it’s better to start their career in a startup or in a VC firm. The people who ask me this question are most of the time students who are interested in both worlds (startup & VC), but don’t know where to start, and are scared that making the wrong choice will prevent them from branching out and join the other side (a.k.a “if I start in a VC firm and don’t like it, it will be hard for me to find a job on the startup side” and vice versa).

In this context, most experienced people will advise you to first get a job in a startup to acquire operational experience, and then to join the VC side later. My view on the topic is a bit more nuanced so I’ll share in the rest of the post the pros and cons of each scenario (VC first or startup first).

1. Pros and cons of starting your career in a VC firm

Pros

The major pro of starting your career on the VC side is that you’ll get to meet many interesting entrepreneurs and explore plenty of business opportunities and markets. Given that you join a good VC firm, you’ll be exposed to plenty of startups at different stages (from idea to growth) in a short amount of time (one to two years). Being able to witness this variety early in your career is a real benefit whether you continue on the VC side or not. If you realize that you prefer to work for a startup, this experience will help you chose better what kind of company you want to join (which stage, in which market, with which business model, etc.). It will also give you a better overview of the whole lifecycle of a startup (how it looks when a startup is in the growth phase compared to the early pre-product/market fit phase). In my eyes, this is the major benefit compared to starting directly in a startup.

Cons

The major con is that your career can plateau fast and for a very long time. When working in a startup, you can have a big impact in a very short amount of time and quickly grow in your role. It’s totally different in a VC firm as the feedback loops are much longer – it takes years to see whether a company is a good investment or not – and as the work is much more “standardized/repetitive” (you’ll do the same things over and over again). It can take years before you get promoted to the next level, and most of the time it’s hard to see whether you’re on a good track or not. The consequence is that it can be tricky to make the right call (should I stay on the VC side or not?) even after two/three years in the business.

If I don’t like my job in my VC firm, will it be a problem to join the startup side?

No, a position in a VC firm as a first professional experience will not be a barrier to join a startup later. Obviously, it depends on what kind of job you target (e.g: if you want to be a developer you’ll need to start from scratch), but in general, the benefits I listed above will also help you get a position in promising startups (most of the time for sales/operations/marketing/finance types of positions).

2. Pros and cons of starting your career in a startup

Pros

The major benefit of starting on the startup side is obviously the operational experience that you will accumulate. Working in a startup and working in a VC firm are two totally different things, and the operational experience you can get in a company will always be a valuable asset when joining the VC side. It can be useful when assessing companies, but also when interacting with founders. I know that many great investors never had any startup experiences, but having worked in a startup will never be considered a bad thing neither (you’ll never be blamed for that, while the opposite can be true).

Cons

The major risk is that if you want to join the VC side, you should do it either very early in your career (after two to three years ideally) or later when you’re successful. Imagine that you’ve been working five to seven years in startups: you have accumulated experience, probably some responsibilities and also a cool salary. Now, if you want to join a VC firm, it won’t be enough to start directly at the Partner level (you need to be a successful entrepreneur or exec), so you’ll need to start at the bottom and probably need to accept a pay cut too. Also, except if you have unique skills, your five to seven years of experience won’t necessarily be a huge advantage compared to the younger candidates with two/three years of startup experience. This is why the real windows of opportunity are either to branch out early in your career or later when you’re successful. Everything in between can be tough.

If I don’t like my startup job, will it be a problem to join the VC side? No, it’s often even an advantage as many VC job offers ask for one to three years of experience working in startups. But don’t do this career change too late (ideally after two/three years max), otherwise the move will be painful.

3. So what should I do? VC firm or startup first?

My advice is simple:

  • If you are interested in both worlds but have a slight preference for one, always pick the preferred one.
  • If you have no preferences, then apply for positions in both industries and pick the best company that you can get. It’s better to start your career in a promising startup where you’ll learn a lot than in a mediocre VC firm. And the opposite is true: if you are accepted in a great VC firm you should seize this opportunity.
  • Finally, don’t wait more than two years before reassessing your career choice. If after two years you’re still unsure whether you want to continue or not, it’s a great time to think about joining the other side (startup or VC, it doesn’t matter).