Venture Capital: Where the Buck Stops

Wojtek Kawczynski felt stuck. Although he was working on a part-time MBA at York University's Schulich School of Business in Toronto and he already had a B.Sc. in biology and a M.Sc. in molecular plant physiology, he wasn't sure what he could do with all that education. But when he read the chapter on venture capital (VC) in the book Alternative Careers in Science: Leaving the Ivory Tower, something clicked. Six months, one headhunter, and many interviews later, Kawczynski became an associate at Ventures West, a Vancouver-based VC company with an office in Toronto. Kawczynski is still counting his blessings. "I never thought I would find a job where I would like to get up in the morning and go to work," he says.

Finding an angel in the investment world is one of the most difficult hurdles facing start-ups or rapidly growing companies in technology or life sciences. That's where VC comes in, as an important source of equity and management support for start-up companies.

What does a venture capitalist do? Associates are involved in prospective deals from the word go and are always part of a team, usually with a partner acting as a mentor. The team researches--or "sources"--prospective companies, makes the first contact, looks at business plans, visits companies, recommendations whether to invest in them, and conducts due diligence. A few companies survive the process through to final deal negotiations and closing. And the work doesn't end there. Venture capitalists continue to nurture growth in companies they fund by providing expertise in the management, strategic marketing, and planning of their investee companies.

Most venture capitalists will tell you that the critical thinking skills developed during graduate training in pure or applied science are what VC firms find most appealing when looking for new employees. The VC industry in Canada is small, and there are few job openings. Kawczynski suggests that scientists interested in working in VC should try to gain operational experience by securing a nonbench position in the tech industry or in a biotech or pharmaceutical company for a few years. An MBA increases your chances of promotion within a firm and also provides a great way to bridge the gap between your technical experience and successful marketing of technology, according to Robin Axon, a recent addition to the Ventures West team.

"I found that I had one way of thinking as an engineer that was very focused on the technology itself," says Axon. "The MBA helped me understand that the technology does not sell itself and that there is more to a company than the technology. I became more oriented toward the development and commercial aspects in the process," he explains. The limited number of career opportunities for aerospace engineers in Canada led Axon to abandon his career at the Canadian Space Agency.

Although many entry-level positions are reserved for science graduates who also have an MBA, the latter is not an essential requirement for hiring. Riaz Bandali is vice president of MDS Capital Corp., a VC firm that focuses on the life sciences. Bandali suggests that candidates who ooze operational experience also stand a good chance of finding work in VC. "The most important prerequisites are that the individual has a strong grounding in a scientific discipline and a strong acumen with respect to commercial business," says Bandali. Showing that you have a clue about running a business, be it your own or someone else's, is key to securing a job in venture capital--and that means understanding how to realize a return and how to build the company.

Taking the time to build contacts in the industry is one way of finding out about job vacancies and getting an interview. The Canadian Venture Capital Association provides profiles of VC companies with funds in Canada and is a good starting point. Most VC companies often proactively seek the most promising technologies at universities, so it is also a good idea to get acquainted with the folks in your local academic tech transfer office.

And what are the personality traits best suited for VC? It helps to be open-minded, proactive, amiable, good at assessing people quickly, and comfortable with risk. Venture capitalists should also be comfortable with being generalists. "Most VCs are a mile wide and an inch deep," says Kawczynski, and that requires them to be able to quickly interpret the market trends in different fields, even outside their expertise.

Getting a job in VC is no walk in the park; there is fierce competition for the limited number of jobs, despite all of the reports of record-breaking returns and growth in the industry. But for those who are in the industry, VC offers great financial rewards and the opportunity to make important contacts in the hottest industries. You never know--your science degree might evolve into more than you ever dreamed of.

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