My name is Dillon Roberts, I am 22 years old and a recent graduate of the University of Bath, where I studied Politics with Economics. Much like many upcoming graduates, I had a key decision to make as I approached the end of my degree studies – pursue traditional graduate job opportunities or explore different industries to gain a deeper understanding of my interests. I grappled with this choice for a while and realised that working in the same place for two years on a graduate scheme with no prior experience of the industry was not an attractive proposition. So instead, I began applying for summer internships across a range of sectors I found interesting. Out of 50 internship applications, I received 49 rejections and one offer.
Sturgeon Capital, the emerging markets PE & VC firm operating in Central & South Asia, offered me a position on their internship programme as a VC investment Analyst for three months over the summer. I accepted the role on the 10th of May and started work on the 5th of June. I have thoroughly enjoyed learning more about VC investing in emerging markets, developing new competencies, and working with the talented team at Sturgeon. Below I have compiled learnings that I think are useful for those looking to apply to Sturgeon’s summer internship next year, or for any undergraduate interested in a career in VC.
I have split the following list into three sections:
A. Overview of what I learned about the whole VC industry
B. Suggestions for junior VCs
C. Benefits of working at Sturgeon
A - Overview
The key to asking good questions is admitting what you do not know
Always start your understanding from first principles. Break a concept down into its simplest form and then build up understanding and conviction as you gain more information. I learned how beneficial this mode of thinking can be during my internship, and it is a concept each team member applies to their own tasks.
There are no adults in the room
This can be applied to any industry but especially in VC. There is no set formula to be successful in VC, and no matter how much it may seem a partner can predict the next big winner in your portfolio, know that they have made hundreds if not thousands of judgement calls just like that which have not paid off. Everyone is human and putting people on pedestals because of their previous experience will only make learning from them harder.
Personal brand building is important
Because VC is an industry based on connections and network, it is important to cultivate your own personal brand so you can build a profile within the industry. Many people use LinkedIn to build brand, however I can see platforms like TikTok becoming more important in the future. If you can, find something within the industry you are passionate about and make content surrounding that.
A notable example of this is the Frontier Markets Podcast run by Krishaan Khubchand, a recent graduate from Birkbeck school of Law. His recent episode with the Chief Investment Officer of Sturgeon Capital Kiyan Zandiyeh can be found here.
Surrounding yourself with the best
As motivational speaker and author Jim Rohn once wrote, ‘you are the average of the five people you spend the most time with.’ For most adults, this means the people you work with. Surrounding yourself with people who are smarter than you and have different skillsets to you will motivate you to achieve more than you ever thought you could.
If you asked me at the beginning of my internship with Sturgeon Capital whether I could present an investment proposal to IC, I would have said no. I would have been too nervous, and I did not have the knowledge to understand what constitutes an attractive investment. There is value in surrounding yourself with those who are experts in given tasks, as if you are willing you can learn through exposure and then your own trial and error.
I learned how to pitch an Investment to IC by first studying those that came before me. By watching the other partners, I developed a base level understanding of what constitutes an attractive investment. Next, I put these assumptions into practice using my own investment proposals. Then by listening to feedback and constantly iterating my own processes, I reached a stage where I could effectively pitch a new investment concisely and confidently. I still have a way to go to master this process, and as I continue to practice and learn, I will continue to improve.
VC is a sales business
Effective communication and persuasion are ever-present skills to hone. You are constantly highlighting your value as an individual and your firm as a compelling investment partner for entrepreneurs. You are creating pitches to attract LPs and sell them on your investment thesis. Sales is an important part of VC.
VC Pipeline = Network
To access top deal flow, your firm needs a reputation as a top decile investor and partner. Founders talk, and so do other VCs, so if founders believe your firm is value-add on their cap table, and other VCs see your worth during co-investments, then your VC pipeline will naturally fill with attractive opportunities.
The reputation of the firm’s employees contributes significantly to the reputation of the firm. If you are recognised in the VC sphere as a ‘serious person,’ then this will reinforce the reputation of your firm and lead to more attractive opportunities in your pipeline. For Sturgeon, it has taken years of team members being on the ground in our target geographies, making connections in local VC networks and establishing a reputation with founders as a ‘serious player’ in their VC ecosystem.
The role of the VC is one of effective resource aggregation
VCs must recognise the value of leveraging their network and exposure to support their portfolio companies. The role of a VC involves aggregating resources strategically, be it through initiatives like Sturgeon’s Venture Partner programme or collaborative partnerships with other organisations.
While some tasks benefit from in-house expertise, it is important to understand the importance of utilising the skills and capabilities of external individuals or companies within your network when needed. This approach provides a varied set of resources and perspectives to support growth and success of portfolios in a more meaningful capacity.
To succeed you need to have founders who are successful operators and killers
It can be hard to determine whether a founder has what it takes to be a successful operator. You can sometimes tell through the ways founders respond to your questions, and their overall personality, whether they have what it takes to create a successful business. It is also important to recognise whether the founder has the grit and determination to push through when the going gets tough.
At least once in a ten-year VC fund, macroeconomic conditions will change such that it will become increasingly difficult for your portfolio companies to operate. You need to ensure the founders you chose to back have the strength and determination to get through these challenging times, make tough decisions effectively and ultimately come out the other side more resilient.
Founders over business model
Founders should always be the reason a VC invests in a company. If the business model of a startup is overemphasised during the due diligence process, then investors can find themselves involved in the operational side of the business. This is a misallocation of human capital as VCs should be focused on adding value to their portfolio companies and finding new investments, not running a company that is being mismanaged by its leadership.
Understand that every single business model of a portfolio company will change beyond recognition during its journey to scale. It is the founder’s ability to iterate, being driven by new learnings gathered and synthesised to inform their execution, that creates a successful portfolio company.
This observation is not a call to discount business model and focus only on founders. The business model must add up with a margin for error in the founders’ and our forecasts. That being said, the weighting should still remain in favour of the founding team.
Find the variables that an investment must manage to be successful
Each investment has between 3-5 variables that can determine its success. The quicker you can understand these variables and the steps needed to control/manage them, the faster you can determine whether an investment is worthwhile.
The default outcome is failure – make peace with this and know the mistakes of others
Sometimes you do weeks of due diligence, spend considerable time getting to know founders and take time to build up conviction around an investment proposal, just for it to get struck down at IC. If you take this decision personally, you will not last in VC.
You need to understand that not every deal you bring to IC is going to be met with overwhelming support no questions asked. Part of the VC process is for your peers to try and break your core assumptions around a business proposal, they are not trying to catch you out or make a fool out of you. It is part of the due diligence process, and it is important not to take a rejection as a failure or take it personally.
Speed at which emerging markets ecosystems develop is random
Development typically is driven by how quickly successful outcomes can be created. The work we do at the frontier should make others recognise the opportunities that exist in these markets, thus growing the entire pie. Several factors can stifle this progress however, including geopolitics and local government’s decisions. The job we do can impact these processes in a positive way, but it is important to consider that the governments in our countries can sometimes act in a way that is a detrimental to our work.
B - For People just starting out in VC
The job is ‘sink’ or ‘swim’
Working in a VC is fast paced and the tasks you are given vary significantly. This is most applicable to VC funds in their initial stages of development, where there is no budget or room for specialists in their own niche roles. In young VC firms, you will often see that people’s jobs are diverse and that they have several areas of responsibility that may seem unrelated. Firms like this are a fantastic opportunity for anyone just starting out in the industry and I recommend if you are lucky enough to be offered a job at a firm like this – take it quickly or someone else will.
You will be given significant responsibility from day one in several different areas and your progress is simple – if you perform well or ‘swim,’ you continue to move forwards and gain more responsibilities. If you fail to perform or ‘sink,’ you leave. There is no room for people who do not perform.
Develop your own conviction around investments
Do the initial groundwork that enables you to develop a high base level of understanding
Find the 3-5 variables that need to be overcome for an investment to succeed
Assign difficulty levels to each of the variables to represent strength of conviction
Assume each company will hit an existential event that they need to survive to succeed – can the founder overcome this?
Be authentic not transactional
Founders can tell when an investor is showing genuine interest in their project. Investors can tell when others are just trying to gather information. Always try and establish a friendly relationship with people before starting a business relationship.
Email inbox management
If you work in VC, you will be working on several projects at once on top of your other responsibilities. Because of this, organisation is important. Make a new file on Outlook or your chosen email inbox for every project you are working on. Meticulous planning and organisation will help you stay on top of your tasks.
VC newsletters
Sign up to VC newsletters to get high level information about where the market is headed. Examples of some I read are:
Strictly VC
First Round Review
There are many VC-related podcasts out there too if you are more of an auditory learner. Here are some additional examples – Masters of Scale, The Consumer VC, a16z Podcast, How I Built This, Women in Venture Capital, The Twenty Minute VC, Bootstrapped VC, The Balderton Podcast.
Treat founders with the upmost respect
I found the power dynamic between investors and founders odd at first, having only ever being in education environments where the balance of power sits firmly with the staff. It is important not to let this new power dynamic distract you from being a kind and humble individual. Do not be late, do not cancel on founders multiple times, reply to emails quickly, complete the work you promised, do not be rude. The role of the VC is to be a sounding board for founders, so cultivate an environment that makes them want to share with you.
C – Benefits of working at Sturgeon
You get exposure to all sides of the business
Deal flow
Due diligence process
Expert calls
Investment Committee presentations
Networking events
Portfolio management
Using data science in VC
You get given levels of responsibility no other intern gets
The best example of this I can give is that you get to bring companies to IC and if you present your case well and the other IC members agree, then your company can receive investment
You get the chance to work with leading founders from around the world
Sturgeon Capital covers many geographies in emerging and frontier markets. Some of the people we work with are among the most successful in their respective countries. You can learn lots from speaking to these people and by analysing how they operate.
You get pushed out of your comfort zone to succeed
You are entrusted to carry out important jobs within the firm from your first day in the office.
You work with a diverse group of people
The Sturgeon team is spread across the countries that it invests in, from Bangladesh to Pakistan, Uzbekistan and Kazakhstan. People come from different academic backgrounds and career experience, creating a dynamic environment that fosters debate and alternative points of view.