What do young venture capitalists do all day?

You graduated University with marks and managed to land your dream job at a venture capital (VC) firm, beating out the countless others who applied.

Congratulations, you are now ready to deploy capital, take meetings with the next Steve Jobs, and ultimately reap millions of dollars a year from your wise investments.

Right?

Wrong.

Understand that VC firms have a hierarchy and you are at the very bottom. While your role will be integral and prestigious, you certainly won’t be shaking hands as you invest in what you believe to be the next Google.

So what will you be doing then? What exactly do young venture capitalists do all day?

This is what we are going to discuss in this article.

What is a VC Analyst?

An analyst role is the lowest tier of the VC hierarchy (but above fellows and scouts). If you manage to land a role at a VC firm (which in itself is a difficult task), it will most likely be as an analyst.

But what do analysts do?

Here is a snippet of a job description for an analyst role at Commerce Ventures.

“This investment professional will focus on supporting the fund’s investment activities in the retail and financial services industries. She/he will work closely with and as an integral part of our small and collaborative team of venture professionals (which will total 5 with this addition).”

Analysts play an important role by doing much of the grunt work of the firm, weeding out which startup is worthy to share with their higher-ups. They conduct industry research, assess opportunities, and more.

Here is a breakdown of various responsibilities.

• Reading and reviewing business plans and pitch decks. Every startup has a calling card…a pitch deck. This deck is an overview of their offering, total addressable market, metrics, advantages, and the financial opportunity. For every hundred decks a VC receives, only a small percentage are actually investable opportunities. Analysts spend a great deal of time determining which deck to bring to their bosses (the associates and partners of the firm).
• Assist in building out the overall framework for the firm’s investment evaluation. Analysts also make recommendations in business strategy based on findings from research or current events.
• Assessing market and company attractiveness to help identify compelling businesses. An analyst determines if the company is an attractive investment opportunity for the firm. Does the startup have good financials? Is it profitable? Does it have enough users to grow and scale? Are there other competitors? Would this startup bring a large return if an investment is made into the startup?
• Due diligence. The analyst digs deep into the startup to see if it truly is a viable investment opportunity. This is the deep dive into the startup. Analysts are at the forefront of conducting an analysis of the business, the industry thesis, breaking down the competitive landscape, researching the business/pricing model, financial modeling and deal structuring.
• Work with the firm’s existing portfolio companies. Firms have existing investments in additional companies and it is in their best interest to see these companies succeed (a VC firm only truly profits when one of their portfolio companies has a successful exit). It isn’t uncommon for analysts to aggregate data from their portfolio companies (pulling data from the financials to analyze and ensure the company is on the right course).
• Write and prepare market analyses and presentations. These are used to help with the firm's investment decisions as well as for the firm’s network of corporate relationships.
• Participate and contribute in daily meetings to discuss investment opportunities and portfolio companies.
• Prepare presentations and investment memoranda.
• Do whatever they can to help keep the ship afloat and on a good path. Analysts aren’t afraid to roll up their sleeves and wear multiple hats.

But what does all this mean on an actual day of work?

A day in the life of a VC analyst

Much like other jobs in finance, the days and hours are long and the work is never-ending. Analysts are usually in the office early and begin their day with a combination of responding to emails, confirming meetings, and reading the latest industry news that their firm focuses on.

Analysts often have multiple meetings throughout the day. This could include meetings where they pitch the general partners (GPs) of the fund on any interesting and notable startups, meetings with founders of the firm’s portfolio companies, due diligence meetings on possible investments, and listening to pitches from founders who are seeking investment.

When analysts aren’t in meetings, they are usually on the phone or continuing to gather research.

For a more detailed breakdown, Firsthand.co has a great breakdown of an average day.

It should be noted that analysts have no power to make investment decisions. So rather than being the face behind a major investment and taking the credit, analysts are usually part of the team that is rarely mentioned (which could be a bummer if you want to be known for your role in discovering the next Uber).

Requirements

If you think an analyst role is for you, here is a list of some of the requirements that VC firms prefer their candidates to have.

• Bachelor’s Degree in a quantitative field with outstanding academic achievement. This includes finance, economics, statistics, or another related field. An MBA is usually preferred.
• Proficiency in a variety of financial concepts. Analysts need to be able to interpret financial data and make predictions based on the data.
• Ability to communicate financial data in a simple and easily understood manner.
• Prior experience in investment banking or an investment fund internship.
• Excel skills at an expert level. Knowledge of Notion, Airtable, or Google Sheets is also useful.
• A strong work ethic and attention to detail.
• Ability to deeply research companies, financial data, business opportunities and aggregate data.
• Ability to wear multiple hats to get the job done.

If this seems difficult, it is. Working as a VC analyst is no easy job.

So what is the salary? According to John Gannon’s blog, an analyst salary is $76k as of 2021