How business schools are preparing MBA students for venture capital careers

BY Sydney LakeDecember 02, 2021, 1:00 PM
Outside a cluster of Silicon Valley firms in Menlo Park, Calif., in November 2017.
Smith Collection—Gado/Getty Images

MBA programs are designed to equip graduates with the necessary education to excel in a a variety of careers spanning from investment banking to technology. But what about jobs that require myriad expertise, like venture capital?

People think that venture capital is strictly a finance job, says Elena Loutskina, a professor at the University of Virginia’s Darden School of Business. “It’s not,” she tells Fortune. “It takes a lot of different skill sets to be a successful venture capitalist.”

For that reason, only about 1% of all MBA graduates go into venture capital, according to TransparentCareer. Broad-reaching education is necessary because VC jobs are also particularly difficult to come by; there are only about 1,100 funds in the U.S. with a little more than 5,000 people employed in total. 

Loutskina argues that students interested in VC need an education composed of “puzzle pieces” to fully prepare them for a career in the industry. At Darden, which Fortune ranks as having the No. 14 MBA program in the U.S., each class and cocurricular opportunity serves a purpose in preparing MBA students to succeed in venture capital careers. VC firms are looking for candidates proficient in several job functions and who have an understanding of their nascent company’s industry, according to research by TransparentCareer.

“In a lot of different other jobs, you’re probably going to be fine with just dropping a résumé and waiting for the interview,” adds Niklas Bretschneider, a class of 2022 student at the University of Berkeley’s Haas School of Business. “But in VC, that’s just not going to happen, because there’s so few jobs and so many people interested in it.”

In such a competitive industry, what are business schools doing to prepare students passionate about venture capital, and how can students land a job postgraduation?

In-class experiences

Bretschneider took an interest in VC during Lean Launchpad, an elective, “flipped classroom” course in which Haas students create their own startups.

In Lean Launchpad, three to four students develop an idea for a startup company, conduct interviews with potential users, and report their findings and updates with the class each week. Venture capitalists and angel investors also provide feedback to students about their ideas. 

During the course of the semester, Bretschneider’s startup idea morphed from a platform to manage desktop notifications to an automated tool intended to help professionals prepare for first meetings with new business connections. By the time the course was over, his team had conducted interviews with 200 potential users. 

“Going through this whole journey—we’re still working on it—I think that’s something that made me a lot more passionate about entrepreneurship, but also venture capital specifically because I saw that side of the table, too,” he says.

Other top MBA programs, including Darden, offer similar experiential classes, but also coursework that examines the many stages of venture capital—from seed funds to mergers and acquisitions. Through coursework, it’s important for students to understand deal flow and due diligence and see how deals are made and exit strategies are executed, Loutskina says.

“They see the full cycle of VC decision-making, and that provides them with a better understanding of what the VC area is and what a VC job is,” she adds. 

Cocurricular and internship opportunities

Generally speaking, VC internships are hard to come by. Internships and jobs aren’t typically posted publicly, according to TransparentCareer, so that’s why mentorships, cocurricular activities, and networking are so critical to landing a job in VC.

Darden serves as just one example of how business schools are offering students these add-on opportunities to get connected in the VC world. Through its Venture Capital Initiative, Darden offers several learning experiences for VC students outside the classroom. 

VC Fridays are an opportunity for students to schedule one-hour meetings with seed fund partners, which allows students to learn more about the industry and to network. Darden also has a VC Bootcamp—a two-day workshop focused on the key elements of venture capital: due diligence, deal structures and terms, legal requirements, small-business strategy and operations, and exit strategies. 

But one of its initiatives, the Darden Venture Fellows Program, really targets the challenge of breaking into the VC industry—getting in front of VC funds. Robyn Swift, senior director of strategic initiatives at Darden’s Batten Institute, leads this program from the West Coast, the epicenter of entrepreneurship, venture capital, and private equity.

Darden students who are selected for the program are interviewed by general partners at venture funds, and then get placed at one of the VC’s portfolio companies. These roles can be blended; some students split their time between working with the portfolio company and at the VC fund in investment roles. This initiative aims to remove some of the barriers to entry and get talent in the door at VC funds, Swift says. While the program gives students a standing chance at landing a VC job postgraduation, the reality is the industry is still extremely competitive.

“We’re trying to provide as many opportunities as possible and to make sure that the students that are completely committed are incredibly well-prepared to go into those roles and to be successful,” Swift says. “But there’s also this reality in the numbers and that students’ interests shift. Sometimes they get lost.”

VC’s secret sauce

Haas, which is located near Silicon Valley, also has ties to entrepreneurship and venture capital firms. VCs had a big year in 2020 with an uptick in SPACs, IPOs, and M&A deals that were VC-backed, says Deepak Gupta, Haas’s VC and startup director.

“Venture capital will run where entrepreneurship is growing,” he tells Fortune. “I think there will be more positions and more appetite for venture capital.”

While an MBA degree can certainly hone a technical skill set necessary for a job in VC, there’s a practice much more valuable for pursuing a career in the field. “The most important thing about venture capital is to build your network, and second is to provide practical and meaningful support to the fund,” Gupta tells Fortune. “The question should always be asked: ‘How can I help?’” And Chris Quaidoo, a Haas class of 2022 student, agrees.

Coming from a VC background before pursuing his MBA, the industry is “very much a mentorship and apprenticeship business,” he says. “The more you can learn from people who have done it for a while and have been successful, the better,” he tells Fortune. 

“Look at the network of whatever school you’re looking at,” he adds, encouraging students to research VC alumni who attended the school.

Sitting idle won’t get you where you need to be in venture capital.

“That’s something that comes with the job,” Bretschneider says. “It’s not just about sitting in an office and looking at a pitch deck and making a decision. It’s more about being out there and talking to people.”

See how the schools you’re considering fared in Fortune’s rankings of the best part-timeexecutive, full-time, and online MBA programs.