Close to 50% of all deals lose money, 20% make 1-2x the initial investment, 15% make 2-5x deals, and 10% make 5-10x. Just 6% make more than 10x - according to a study conducted by Horsley Bridge, a private equity firm - reiterating the value of 'risk' in gaining a significant return.
Pursuing an MBA from a top Business School is key to making it big in the Venture Capital Industry if you don’t have any entrepreneurial experience or a Finance background.
While one could start off as an Analyst or as an investment banker after a Bachelor’s degree and then move on to an Associate position, getting an MBA significantly improves the odds of promotion.
Almost all top MBA schools around the world have specialization or elective courses that deal particularly with venture capital. This is in line with the significant percentage of post-MBA graduates going into the venture capital industry or working with VCs as product managers and entrepreneurs.
Stanford Graduate School of Business, Harvard Business School, and Chicago Booth have the largest percentage of alumni working as venture capitalists.
In three to seven years, a VC firm expects to sell its equity (stock, warrants, options, convertibles) in a portfolio business, ideally through an initial public offering (IPO). The company becomes liquid by selling its stock to the general public, and the VC profits by selling its equity.
In the third quarter of 2023, the global venture capital landscape exhibited notable trends that shed light on the state of the industry. Venture funding during this period reached $73 billion, a 11% increase compared to the previous quarter. However, it was down 15% from the remarkable $86 billion invested in Q3 2022 – a residual optimism in Technology from the pandemic era. Several key developments were defined this quarter, which we will delve into below.