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Smaller VCs will wind down existing funds and be unable to raise another round, then those firms will close (“take a pause to reassess”). VC was a low-interest

Smaller VCs will wind down existing funds and be unable to raise another round, then those firms will close (“take a pause to reassess”). VC was a low-interest rate fueled bubble as by definition any yield is better than 0 or negative yields. VC will obviously continue to exist but with fewer and better firms. More quality companies will be invested in. If I was an associate at a VC firm I would jump ASAP to corporate strategy, investment banking, or whatever it is you are qualified for other than this.

cj 4y ago
> If I was an associate at a VC firm I would jump ASAP Probably good advice if working at a tech company. Perhaps not such great advice if you’re in VC and want to stay in VC. Things like firm loyalty, length of tenure, etc are all valued much more in VC than in tech companies. If you try to pull the “switch jobs ever 2 years for a pay bump” trick in VC, you’ll never end up climbing the ranks and will remain on the bottom.
- monero-xmr 4y ago
  I just don’t know if there’s a path for a junior level person in a shrinking VC world. If you actually built and sold businesses yourself as an entrepreneur, and have real connections, then definitely you have a future but likely you wouldn’t be a junior associate. VC became this weird white-shoe consulting / ibanking path which is bizarre to me because the entrepreneurial journey is so unique and difficult. Definitely one of those “you have to live this to understand” situations to me. I know there is now a generation of well-heeled Stanford and MIT alums who grew up with money and lean on their parents’ SV connections just like at banks and law firms with the Ivy League. If you aren’t those people I would think about a new career. I can spot a grizzled VC pretty quickly compared to the soft ones that were a PM at Stripe for a couple years or whatever they say their journey to VC was.
  - borski 4y ago
    > I just don’t know if there’s a path for a junior level person in a shrinking VC world. Sure there is. Bring in good deals and help close them.
- alephnerd 4y ago
  Associates (as in Junior VCs) are generally expected to exit within 2-3 years - either start their own company (bunch of YC alums are ex-Associates), join CorpDev+Strat or PMs teams at investments, or join a VC oriented MBA program line Wharton or GSB and then become Sr Associate. There are some Associates who become partner track but very very few.
mupuff1234 4y ago
Any reason why you think investment banking won't see the same tailwinds as VC?
- monero-xmr 4y ago
  I’m not an investment banker but my understanding is M&A is far larger than tech, so you can do deals in a variety of industries. You could also go into private equity.
  - mupuff1234 4y ago
    I assume higher interest rates are also decreasing the attractiveness of private equity and to some extent M&A (although at the end of the spectrum, companies going bankrupt can probably lead to a increase in a specific type of M&A)
jmacd 4y ago
There is a contagion component here. A lot of mid size and larger VC funds raised funds specifically to invest in smaller VC funds. While poor performance of these smaller funds won't affect the return profile of their primary funds, it will drag on overall performance from the LPs point of view. A lot of "fine" mid size and large VCs are going to have much less appealing overall profiles.
tempsy 4y ago
The first VCs to go are the small third tier or solo VCs. And the ones caught up in the SPAC or crypto adjacent hype and used up their fund to buy the top of the 2020-2021 bubble in speculative nonsense.
- deleted 4y ago
  [deleted]
AndreLock 4y ago
I agree regarding leaving VC as an associate. Many of these positions are not partner-track. Also, in a world in which term sheets were being signed in 48 hours, it isn't clear what skills they've been building (no financial analysis, little-to-no due diligence, no deal sourcing).
- dpflan 4y ago
  Yeah, what skills transfer is there to a time of due dilligence that should mean something now versus being investor X in Wag’s Nth series raise because you can run digital shoulders with the big VCs and Ashton Kutcher…

cj 4y ago

> If I was an associate at a VC firm I would jump ASAP Probably good advice if working at a tech company. Perhaps not such great advice if you’re in VC and want to stay in VC. Things like firm loyalty, length of tenure, etc are all valued much more in VC than in tech companies. If you try to pull the “switch jobs ever 2 years for a pay bump” trick in VC, you’ll never end up climbing the ranks and will remain on the bottom.

monero-xmr 4y ago
I just don’t know if there’s a path for a junior level person in a shrinking VC world. If you actually built and sold businesses yourself as an entrepreneur, and have real connections, then definitely you have a future but likely you wouldn’t be a junior associate. VC became this weird white-shoe consulting / ibanking path which is bizarre to me because the entrepreneurial journey is so unique and difficult. Definitely one of those “you have to live this to understand” situations to me. I know there is now a generation of well-heeled Stanford and MIT alums who grew up with money and lean on their parents’ SV connections just like at banks and law firms with the Ivy League. If you aren’t those people I would think about a new career. I can spot a grizzled VC pretty quickly compared to the soft ones that were a PM at Stripe for a couple years or whatever they say their journey to VC was.
- borski 4y ago
  > I just don’t know if there’s a path for a junior level person in a shrinking VC world. Sure there is. Bring in good deals and help close them.
alephnerd 4y ago
Associates (as in Junior VCs) are generally expected to exit within 2-3 years - either start their own company (bunch of YC alums are ex-Associates), join CorpDev+Strat or PMs teams at investments, or join a VC oriented MBA program line Wharton or GSB and then become Sr Associate. There are some Associates who become partner track but very very few.

mupuff1234 4y ago

Any reason why you think investment banking won't see the same tailwinds as VC?

monero-xmr 4y ago
I’m not an investment banker but my understanding is M&A is far larger than tech, so you can do deals in a variety of industries. You could also go into private equity.
- mupuff1234 4y ago
  I assume higher interest rates are also decreasing the attractiveness of private equity and to some extent M&A (although at the end of the spectrum, companies going bankrupt can probably lead to a increase in a specific type of M&A)

jmacd 4y ago

There is a contagion component here. A lot of mid size and larger VC funds raised funds specifically to invest in smaller VC funds. While poor performance of these smaller funds won't affect the return profile of their primary funds, it will drag on overall performance from the LPs point of view. A lot of "fine" mid size and large VCs are going to have much less appealing overall profiles.

tempsy 4y ago

The first VCs to go are the small third tier or solo VCs. And the ones caught up in the SPAC or crypto adjacent hype and used up their fund to buy the top of the 2020-2021 bubble in speculative nonsense.

deleted 4y ago
[deleted]

AndreLock 4y ago

I agree regarding leaving VC as an associate. Many of these positions are not partner-track. Also, in a world in which term sheets were being signed in 48 hours, it isn't clear what skills they've been building (no financial analysis, little-to-no due diligence, no deal sourcing).

dpflan 4y ago
Yeah, what skills transfer is there to a time of due dilligence that should mean something now versus being investor X in Wag’s Nth series raise because you can run digital shoulders with the big VCs and Ashton Kutcher…