- Young VCs say they’re being hounded by recruiters.
- Venture has traditionally been an invitational, long-term gig where job-hopping was frowned upon.
- Now, VCs are getting multiple calls a week asking if they’ll switch firms or go to crypto startups.
Before the pandemic, a relatively junior associate who’d only been at his New York growth-stage venture firm for a few years would get maybe five cold calls a year from recruiters.
“They would just ask if I’m interested in looking around,” said the associate, who requested anonymity because he was discussing employment matters.
But in 2021, that trickle of calls became a flood, and he was inundated with multiple calls a week.
“It was crazy,” he said.
On the other side of the country, a principal at a Bay Area seed-stage firm said she started getting cold calls almost immediately after she finished orientation.
“I was only two months in, and recruiters from really big firms started reaching out,” she said.
Gaining entrance into the venture-capital world has always been considered difficult. VC firms rarely posted job ads, and the big ones didn’t poach. They wanted “operators,” or people who had years of experience working at startups.
But for the first time, with record-breaking billions pouring into VC firms at a blistering pace, the venture-capital industry is hurting for qualified people to help it invest all of that money.
Demand for VCs at all levels of experience is only expected to intensify in 2022.
Those who are new to the field are being recruited not only by competing venture firms but also by startups — especially cryptocurrency ones — that dangle huge potential riches. More VCs are also being emboldened to leave cushy jobs and strike out on their own. VC firms used to hire talent managers to help their portfolio companies hire staff. But these days, they’re hiring heads of talent for their own needs.
“The competition for talent is stiffer than ever, at the associate level all the way to the top positions,” said Jody Thelander, the founder and CEO of J. Thelander Consulting.
In response, firms are upping pay to record levels. But even for a finance industry, VC firms today are trying to not make the work only about the money.
“My honest experience — both on the venture and operating side — is that for the best talent, you can never win on just comp,” said Matt Hoffman, the head of talent at M13. “That’s especially true when so many firms have cash to spend.”
Hoffman said M13 put a great deal of emphasis on making its staff feel valued and like they’re there not only to make money but also to make a positive difference in the world.
“The attraction for people who join M13 is to join a team that authentically cares about one another and does interesting and meaningful work for our portfolio companies,” Hoffman said.
Derek Norton, a managing general partner at Watertower Ventures, said he tried to recruit people as early as possible in their careers and ensure they’re rewarded for success.
“They eat what they kill,” Norton said, adding that a venture career was more desirable than ever, with athletes, musicians, and actors clamoring to join. “It’s the coolest job you can have.”
Venture firms also benefit from an industry credo: Job-hopping is more stigmatized than in other fields, such as investment banking or consulting.
“I’m just establishing myself as a VC, so it’s bad to jump around,” the Bay Area principal said. She added that when she started fielding calls from recruiters, two months after starting, she rebuffed them all. “I feel like everyone knows each other in the Valley, so the person recruiting is actually really close with my partners.”
“I don’t know of people who’ve made multiple leaps,” an associate at another Bay Area firm said. “It’s definitely frowned upon. There’s a lot of trade secrets in the industry, and people are always concerned about that stuff.”
There is also a strong financial reason for loyalty: The bulk of VC compensation typically isn’t paid out until the startups that VCs invest in mature enough to go public, get acquired, or have some other
liquidity
event. It can take eight to 10 years for the deals made from a particular fund to mature into lucrative returns.
The associate said, “The economics are pretty incentivized for making you stick around for a long time.”
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