Working in VC has made me a better entrepreneur
I’m working at Chicago Ventures as Entrepreneur in Residence, a unique position that I believe will make me a more strategic founder for years to come.
Second-time founders are strategic
First-time founders usually build products based on personal interests. If they’re lucky - with the right timing, market, and early adoption - they might get to work on that thing forever. Repeat founders take a more sophisticated approach, learning from their past mistakes.
The first two companies I started were based on personal interests.
I started Kubmo in college to teach women in developing countries how to code. Our product resembled a non-profit coding bootcamp more so than a technology startup. I learned that revenue strategy matters just as much as solving a problem.
My second company was Moonlight, a platform for software developers to find remote work and get paid weekly. This startup had meaningful user value, automation, traction, and VC funding. Here, I learned the growing pains of scaling a two-sided marketplace where supply and demand have competing needs (hint: the payer wins).
I also saw these patterns as an employee at Fitbit and theSkimm.
James Park, the founder of Fitbit and serial entrepreneur, was inspired by the technology of Nintendo Wii and identified personal health data as a market wedge. Fitbit started by selling one-off tracking devices to consumers, then formed partnerships with distributors, and eventually found a subscription software approach for more long-term predictable revenue. His prior experience as an entrepreneur led to a more mature business strategy than other early competitors.
First-time founders Carly and Danielle started theSkimm in 2012. They were early adopters of the email newsletter movement, writing witty news for a focused audience of professional millennial women. They built a loyal following, garnered investment from VCs like Google Ventures, and attracted splashy coverage from mainstream media. The content was beloved, but they never monetized beyond manual ads and sponsorships.
In contrast, second-time founder Chris Best watched this newsletter trend and launched Substack - the infrastructure for any creator to write and monetize their content with a subscription. They have over a million people paying subscriptions to writers on the platform, and they keep a 10% cut of payment volume (Note: You’re reading this on Substack right now).
Repeat founders have a huge advantage, they’ve gone through the motions many times. They understand what matters when deciding on the right co-founders, early team, investors, market, distribution, revenue strategy, and so much more that can only come from experience.
From MBA intern to Entrepreneur in Residence
Last summer, I was planning my move from Brooklyn to Chicago to start the full-time Booth MBA. Apprehensive at the thought of returning to student life, I went to Twitter and typed - ‘best VC firm Chicago’.
The top post was from Steven at Chicago Ventures -
After three rounds of projects and interviews with each member of the team, they offered me the position. I was eager to update my LinkedIn profile with a lofty new job title - MBA Intern.
For the past 9 months, I’ve been working at Chicago Ventures and immersing myself in the world of early-stage venture capital. I manage sourcing sprints, network with founders, lead pitch meetings, and support partners through the diligence process. Most importantly, I join partner calls where decisions are made. These meetings are the best education I’ve gotten on what makes founders backable and what investors look for as early indicators of a successful business.
Fast forward to last month, and I was feeling burnt out. I was taking four time-intensive Booth classes, spending at least 20 hours a week at Chicago Ventures, and in the early stages of starting my next company. I was sacrificing the social aspects of the MBA experience, and cutting out sleep and exercise.
As I weighed my options, Jackie and Peter (CV partners) took me to lunch with a proposal that I stay at the firm in a new role - Entrepreneur in Residence. They knew my intention was to start another VC-backed business, and I was learning more relevant skills by working at Chicago Ventures than in most of my business classes.
I accepted the offer, excited to continue working in the immersive world of VC while starting my next company.
How working in VC has made me a better entrepreneur
My experience in VC has transformed who I am as an entrepreneur in three important ways.
Knowledge: I understand startups as an asset class.
A fund is made up of a management team that raises money from limited partners (institutional investors, corporate funds, family funds, etc) who are seeking high-risk, high-reward investments. Venture capital is one of the highest returning asset classes, and LPs are expecting a high return. Investors are looking for entrepreneurs who they believe will create a big enough outcome to return the fund, if not 10x the fund.
Venture capitalists are not simply investing out of intellectual curiosity to build something cool that justifies a Series A round of funding. Their job is to take other people’s money and turn it into more money. If all the portfolio startups fail, they won’t be able to raise another fund. This context helps me to focus on what matters, set the right goals, and imagine a compelling outcome where incentives are aligned.
Network: I have successful advisors on my side.
There are approximately 1,965 VC firms in the US, employing a median of 6 employees. It’s a relatively small industry that’s relationship-based with an ‘up or out’ mentality. New people enter the business either via personal connections or through a mentorship program like an internship or residency. The intention behind mentorship programs is to bring more diversity to VC firm leadership, startup executive teams, company boards, and angel investing.
Working in VC has unlocked access to a tightly connected network of investors, founders, and operators. It’s already opened up doors that were not available to me in the past. Today, I get casual mentorship from partners and successful entrepreneurs. In the future I’ll be able to leverage those connections when I’m raising money, recruiting, or pursuing an exit.
Confidence: I know the process and the investor’s point of view.
I used to be intimidated by investors - they appeared to have all the power. It seemed unfair and random to watch homogeneous founders close big funding rounds without much traction. There are certainly power dynamics at play, but I’ve gained a lot of empathy for how hard it is to identify good businesses and for the responsibility of investing other people’s money.
Investors, like serial founders, are confident because they’re experienced and have done the same thing many times over. They see hundreds of companies and have a clear thesis on what leads to meaningful outcomes. I’ve gained clarity on what it takes to communicate a long-term vision that inspires trust.
I believe that entrepreneurs with experience in VC have a similar advantage to second-time founders. They have additional layers of context to understand how things work and why they matter. I hope more funds will invest in EIR roles and similar programming to further support the startup ecosystem.
Interested in becoming an EIR or hiring one? Read more about the structure of the EIR position on the Chicago Ventures blog here.
Really Well Written Post Emma, Enjoyed learning about the insights of VC world. As a I understand VC business is a Hits driven business and you have spread your bets on the contrary, As entrepreneurs we have to focus all our energy into a single vision. There is so much common and yet Entrepreneur and VCs coexist. Thank you for sharing your lessons learned.
Great run down on why Chicago Ventures was the perfect complement to the MBA and how your founder superpowers are growing. I wonder what value the role of EIR brings to the firm - is it primarily a mentorship role to portfolio companies or does it go beyond that