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- Business Insider asked 25 rising star venture investors what prospective candidates need to do to break into the notoriously difficult and exclusive field of fintech investing.
- Many investors said candidates should do most of their legwork, such as industry research and networking, before applying to work at a venture firm to demonstrate what value they would add after joining.
- Some also suggested working at a financial tech startup first to learn more about the struggles young companies face and how investors can be helpful.
- A group of investors suggested working in other areas of finance, such as banking or consulting, to better identify startups that fix gaps within existing markets.
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Breaking into the venture capital industry is notoriously difficult. Many firms never post open roles, and many senior partners rely heavily on existing networks to meet with and ultimately hire junior firm employees. But once a candidate is in, they’re in.
Business Insider asked 25 rising star fintech venture investors what prospective job candidates need to do to break into the notoriously difficult and exclusive field. All the investors Business Insider spoke to had fewer than 5 years of experience and were considered junior-level employees at their firms, and all focused on making big bets in the red-hot fintech sector.
Overall, the consensus from these investors was that candidates have to gain most of their foundational skills within the finance industry before reaching out to a venture firm where they’d like to work. Many firms are small and want each new employee to add something of significant value, whether that’s experience, skills, or a unique perspective. So it helps to have the basics nailed down before reaching out, the investors said.
“Educate yourself, and in turn use your knowledge to help existing operators and investors to establish a relationship,” Canvas Ventures investor Grace Isford said. “Once you prove your usefulness, it’s much easier to get your foot in the door of a venture capital firm or tech company.”
Investing in fintech at a venture firm is something of a finance double-whammy, many investors said. Not only do candidates need to understand the basics of venture capital, which are rooted in unit economics and macro-trends, but it also helps to understand global economic markets as well as stateside trends that startups can mine to their advantage.
“[Candidates should] develop a root cause understanding of how money moves through our economy, starting with cash and the US checking system,” CRV partner Matt Heiman said. “In particular, I recommend ‘Payments Systems in the US’ by Carol Coye as a great starter text.”
Many investors recommend that job candidates get a handle on the broader fintech landscape, as Heiman suggested, before they select a smaller sector within which they can specialize. The fintech categorization is so broad that it helps to hone in on an area — say payments infrastructure or neobanking — to better stand out compared with other applicants who have more generalized skills.
“Fintech is a super broad category,” Norwest Venture Partners senior associate Brian Moon said. “I recommend that young professionals take the time to figure out what niche area of fintech in particular that they’re genuinely excited about, then become an expert in that area and develop a clear viewpoint. I’ve found that you’ll have a totally different level of conversation with founders when they sense that you actually understand the space.”
Many investors said they gained industry-specific experience at fintech startups within the sector that caught their interest. Working at a startup, or what many investors categorize as “operator experience,” also has the added benefit of learning first-hand what founders and young companies need help with and where investors fit in, they said.
“Working for 3 and a half years within a payments-focused startup like Stripe was absolutely critical in developing a deep understanding of financial infrastructure,” Index Ventures investor Mark Fiorentino said. “I’d encourage young professionals looking to break into fintech investing to go learn it from the inside out, whether that’s at another payments company, a challenger bank, or any of these other fintech-derivative businesses.”
Other avenues of specialization can be traditional financial services, like banking and consulting, or through academic research and exploration, investors said. Investing is about crunching massive sets of data combined with curiosity, investors said, so candidates should find ways to hone their expertise within those two primary skill sets.
“I think venture actually favors non-conventional paths, and often I’ll see people from operating roles, or in financial services, with deeply relevant domain insights,” Kleiner Perkins principal Monica Desai said. “Follow your nose and insights to meet companies and get to know founders within your areas of interest. Your expertise may be helpful to them, and those interactions will help you calibrate your investment theses.”