The Venture Capital Aptitude Test (VCAT)
A very good and insightful post by Guy Kawasaki for those aspiring to be a VC
The Venture Capital Aptitude Test (VCAT)
http://blog.guykawasaki.com/2006/11/the_venture_cap.html
Part I: Work Background
What is your background?
Engineering (add 5 points)
Sales (add 5 points)
Management consulting (subtract 5 points)
Investment banking (subtract 5 points)
Accounting (subtract 5 points)
MBA (subtract 5 points)
The ideal venture capitalist has an engineering or a sales background. Engineering is useful because it helps you understand the technology that you’re investing in—for example, is the entrepreneur trying to defy the laws of physics? Sales is useful because every entrepreneur has to introduce a product and sell it. For the third time in this blog, let me say, “Sales fixes everything.”
The three worst backgrounds for a venture capitalist are management consulting, investment banking, and accounting. Management consulting is bad because it leads you to believe that implementation is easy and insights are hard when the opposite is true in startups. Investment banking is bad because it leads you to believe that everything can be reduced to cells on a spreadsheet and that companies should be built for Wall Street, not customers. Plus, investment bankers are oriented towards doing deals, not building companies. Accounting is bad because it leads you to believe that history not only repeats itself, it predicts the future.
Finally, there is the issue of the pertinence of an MBA to venture capital. The upside is that such a degree can provide additional tools and knowledge (such as being about to calculate that 25% of $1.6 billion is $400 million) to help you make investment decisions and to assist entrepreneurs. The downside is that earning this degree (and I have one) causes most people to develop the hollow arrogance of someone who’s never been tested. All told, the downside of an MBA outweighs the upside.
Fear: I agree with everything except the MBA stuff, naturally. ;)
The Venture Capital Aptitude Test (VCAT)
http://blog.guykawasaki.com/2006/11/the_venture_cap.html
Part I: Work Background
What is your background?
Engineering (add 5 points)
Sales (add 5 points)
Management consulting (subtract 5 points)
Investment banking (subtract 5 points)
Accounting (subtract 5 points)
MBA (subtract 5 points)
The ideal venture capitalist has an engineering or a sales background. Engineering is useful because it helps you understand the technology that you’re investing in—for example, is the entrepreneur trying to defy the laws of physics? Sales is useful because every entrepreneur has to introduce a product and sell it. For the third time in this blog, let me say, “Sales fixes everything.”
The three worst backgrounds for a venture capitalist are management consulting, investment banking, and accounting. Management consulting is bad because it leads you to believe that implementation is easy and insights are hard when the opposite is true in startups. Investment banking is bad because it leads you to believe that everything can be reduced to cells on a spreadsheet and that companies should be built for Wall Street, not customers. Plus, investment bankers are oriented towards doing deals, not building companies. Accounting is bad because it leads you to believe that history not only repeats itself, it predicts the future.
Finally, there is the issue of the pertinence of an MBA to venture capital. The upside is that such a degree can provide additional tools and knowledge (such as being about to calculate that 25% of $1.6 billion is $400 million) to help you make investment decisions and to assist entrepreneurs. The downside is that earning this degree (and I have one) causes most people to develop the hollow arrogance of someone who’s never been tested. All told, the downside of an MBA outweighs the upside.
Fear: I agree with everything except the MBA stuff, naturally. ;)
posted by Fear at 12:49 PM
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