Career Advice for Emerging Investors

Recently, I've had various discussions with young tech investors who, despite early successes, feel they've stagnated in their careers and are looking to make a change. The challenge is that mid-career recruitment is starkly different from entry-level hiring. Based on my diverse experience in various firms at all stages of investing (venture => mutual fund) and a decade of observing my investment club peers, I decided to put some of my thoughts to paper for easy sharing. For the sake of this, I define mid-career roles as roles that offer the beginnings of genuine autonomy, where there is a very real path to permanent risk-taking authority within an organization.

My advice can be summarized in three points, each of which I’ll expand upon.

1. These are much more idiosyncratic, bespoke and scarce roles- understand that the rules of recruiting are different

2. Look for P-P-P- platform - person - path

3. Start thinking about your personal specialization and moats

Understand that this recruiting game is different

Early finance roles have straightforward pathways reminiscent of the college application process: apply through a structured process, outshine peers, and join a vast, circulating pool of junior investors. However, longevity in investing hinges on achieving autonomy, be it leading investments or making portfolio decisions. Given the pyramidal shape of the industry, mid-career roles with high potential to convert into permanent roles are much harder to find- in part because people deliberately don’t leave them. A scaled hedge fund might have 4-5 sector heads who typically stay at the firm for 10+ years. Research analysts at mutual funds have very low churn. Growth and venture partners are famously ensconced, tied down by board seats and firm-to-firm relationships that make leaving very difficult.

Some tips:

1. It will take longer to find a mid-career role because they open up rarely and idiosyncratically. If you’re looking to make a change, set a timeline based on your expected tenure in the role. If you’d budget two months to find a role that you’d expect to last three years, you should be comfortable taking six+ months (at least!) to find a role you hope will last ten+ years. It’s worth being patient and not creating artificial time pressure for yourself- the stakes are higher here.

2. The firms that are constantly hiring are either growing (rare in tech investing these days) or have high turnover themselves (which is worth pondering!). So it is very possible that the best role for you doesn't exist when you begin your search.

3. The process is dramatically more idiosyncratic. While recruiters can work, it is vastly better to get a warm intro to the person in charge of the hiring decision, which will almost always be another investor, not HR. This gives an advantage to those with strong networks, but not arbitrarily- your ability to get warm intros is predictive of your ability to succeed in most roles, especially in venture/growth which are highly social/networked fields.

Look for P-P-P platform-person-path

I advise candidates to look for three key variables when they evaluate potential mid-career roles:

Platform- Does this firm provide you with the resources you need to develop your career? Does it have a good brand, capital, dealflow? Does it provide access to datascience and research? Is it a place you would want to be associated with for the next decade or more?

What to understand:

• How is the firm’s platform (brand, resourcing, etc.)? Platform is especially essential for early-stage venture funds- without inbound deal flow and the ability to win competitive deals, early-stage venture is an entirely different job. As a young investor, your life will be entirely different at a top 25 VC (which over time have captured the lion’s share of excess returns) vs. an emerging VC.

• In growth investing, the platform discussion is more nuanced. Growth investing is an industry in flux- it arguably expanded too rapidly because to both LPs and investors it had the appeal of taking VC to hedge fund scale. The sticky capital and long feedback loops of venture (which are both investor-career favorable) paired with the raw scale of public markets to attract dollars and people like moths to a light. To me, the question of whether there is really a class of “sought after” growth deals that are alpha generative only if you’re able to earn “access” is a settled question in early-stage investing and a more open question in growth investing. There was certainly a time (2021) when investors were so eager to demonstrate “access” for personal branding/fundraising purposes that they willingly overpaid. In short- being at a better-resourced/branded firm is generally better, but the specifics of a specific situation (either a firm or investment) in growth can outweigh that more easily than in venture.

• In the public market world, platform means something different- the real distinction is whether you have the scale and resources to get access to management teams, research, etc. so that you can credibly be a part of the public conversation on the companies you follow. There are other ways to generate strong returns, but it will help your long term career if you are able to build your reputation with other investors, management teams, etc. Beyond that, it's arguably much less relevant for successful investing unless the firm has something truly world class as an offering (a cutting edge data science program, etc.).

Person- Who will you be working for- aka which senior person is going to be championing my investments and (later) my career? Is that person known for being good to work with? Do you deeply respect them? Are they likely to stay at the firm for the long haul? This will almost certainly be your primary working relationship- it’s a huge decision.

Advice here, again in no particular order:

• Find someone who habitually treats people well and is a positive sum thinker. Your promotion will probably involve them ceding some of the responsibility/authority they have to you- not everyone does that so easily.

• Make sure you really understand them personally- their drivers, background and quirks. Ideally they are still in a highly motivated place in life, you get along with them, etc.

• Make sure you really respect/admire their investing process/decision-making. It will influence yours substantially.

Path- What is the path to taking risk (leading a deal, owning public positions, managing a portfolio, etc.)? Is there a clearly defined timeline? Who makes the decision?

Advice here:

• It is always best to work for someone with a fair degree of authority over your promotion, and this is one of the most critical variables for your career growth. You can and should ask about this directly: “How would the decision to promote me get made, and by who? What is a reasonable timeline for that?" etc.

• If your hope is to move up quickly, it is important to understand whether the decision-maker has arbitrary power. Large institutions sometimes impose rules to prevent this from happening, whereas at smaller funds, promotion decisions are sometimes made by a single person. If you want stability and predictability, the former is your play. If you want to move fast, the latter is better. The best possible set-up is that you work directly on a daily basis with someone who has the power to promote you without consulting anyone else- think about how far a given scenario is from that.

Think about specializing yourself as an investor

Most risk-taking investors have a specialty that narrows their focus to a scope that allows for both excellence and moat-building. It could be a specific stage, sub-sector, geography, strategy or combination of the above. To increase the odds of success, it’s great to start thinking about what that looks like for you. Is your goal to have the deepest possible network? Be at the cutting edge of understanding a given subdomain? Own a city or geography? If you can’t articulate what you hope to become in ten years, it is that much harder to find the P-P-P that is best fit for you. What is striking about many young investors is that it is this point in their career where prestige starts to lose its usefulness as a guide- this about building a life for yourself that stokes your passions, has your own unique twist on it, accommodates your family goals, etc. You’ll be far more convincing as a candidate if you can articulate how a potential role is a great fit for your aims than if the folks hiring get the sense that you’re trying to blindly land the most prestigious possible role. That's great for motivating young people to work hard, but somewhat less great at generating differentiated, compelling investors.

Taken together- this is a tough industry. Feedback loops are long, macro cycles can overshadow otherwise successful careers and the margin for error early/mid-career can be narrow. Thankfully, it’s still very possible, even probable, to succeed if you recognize the game you’re playing, aim to work with good people, can clearly, consistently articulate what it is you’re trying to achieve and pair all of that with a health dose of patience if you can afford to have it. If you're reading this with purpose- best of luck and if I can be helpful, feel free to shoot me an email with a specific question.