Fram has worked with the Venture Capital (VC) community for many years. Whilst we cover a number of key functions, we were very busy in 2022 helping firms hire Investment Managers and Directors. It’s always been a desirable career, but what do VCs look for when hiring an Investment Manager?

VCs are instrumental in fostering innovation and driving business growth. As guardians of capital, VCs rely on skilled Investment Managers to carefully evaluate investment opportunities. While a background in mergers and acquisitions (M&A) and a recognised qualification, such as the ACA, can be important, VCs also emphasise the significance of people skills and commercial acumen. These attributes prove particularly valuable in early-stage investments where traditional financial indicators may be less clear-cut.

A strong foundation in finance is essential for Investment Managers. VCs seek professionals who possess a deep understanding of financial statements, valuation techniques, and investment analysis. This expertise allows investment managers to assess the potential and viability of investment opportunities, decode complex financial data, and make informed decisions. The ability to evaluate risks, identify opportunities, and project potential returns is paramount in building a successful investment portfolio.

The traditional hunting ground for many VC firms is early career M&A professionals. VCs place great value on candidates with experience in mergers and acquisitions (M&A). Such a background equips investment managers with the skills necessary to evaluate companies, identify synergies, and negotiate deals. This expertise proves invaluable in managing portfolio companies, where strategic acquisitions or partnerships can drive growth and enhance overall value. A strong M&A background demonstrates an investment manager's ability to assess potential exit opportunities and maximize returns for investors.

However, it isn’t the only route to a career in VC. Whilst financial acumen is crucial, VCs also recognise the significance of people skills and relationship building in the role of an Investment Manager. Effective communication and interpersonal skills enable Investment Managers to forge strong relationships with entrepreneurs, founders, and management teams. Building trust and rapport allows investment managers to navigate challenging situations, provide guidance, and collaborate effectively to drive the success of portfolio companies. Additionally, the ability to network and establish connections within the industry proves valuable in sourcing potential investment opportunities. That’s why a willingness to travel and to attend events is an often overlooked important quality to demonstrate in interview.

Investment Managers also need to possess a keen sense of commercial acumen to identify market trends, evaluate competitive landscapes, and recognise opportunities for growth. Early-stage investments, in particular, require a level of adaptability and foresight, as financial indicators and profitability may be less evident. The ability to assess market potential, identify disruptive technologies or business models, and make calculated investment decisions is a crucial skill that VCs seek in investment managers. Former founders with great people skills, and ex-industry professionals with a commercial mind can sometimes transition into VC.

Finally, Investment Managers must exhibit strong strategic thinking and problem-solving abilities. VCs look for candidates who can analyse complex situations, identify key issues, and propose innovative solutions. The capacity to navigate uncertainty, assess market dynamics, and anticipate future challenges allows Investment Managers to make agile decisions that align with the overall investment strategy.

VC is a regarding career, both intellectually and financially, but it’s also hard work and fiercely competitive. I’d advise anyone considering a career in VC to give consideration as to how they demonstrate their passion for entrepreneurship, for building relationships, and to have examples ready of commercial acumen.