Published On: November 9th, 2020
Venture Capital, or shortly called VC firms, are the financial institutions that typically invest in startups to gain a high return rate. Venture capitalists are wealthy investors who anticipate the potential growth of startup business and invest up to a certain percentage.
VCs are always seeking potential startup businesses with high ROI and low risks to generate viable profit. Usually, venture capitalists invest in firms with no access or limited access to the capital market by boosting their core functions while leveraging risks. With the substantial investment, VCs get the power to share their opinions and make changes in the business to accelerate profits.
In the year 2018, $254 billion was invested by venture capitalists globally – a 46% leap from 2017. Talking about the leap, in 2019’s first quarter, VC deals cross over $75 billion, and the $129 billion marks have been touched in the first half of 2020 – WoW. In a way, venture capital is a booming market, and if you want to be part of it, that would be great for your career.
We can’t deny that the VC career path hasn’t received mainstream attention, especially in India, where startup culture is slowly growing. Thus, you might have numerous questions related to venture capital firms and investors before starting your VC journey.
Colitco is a leading online content-driven platform in India for entrepreneurs and aspiring students; thus, we are going to cover top venture capital related questions in our venture capital articles. We hope you find all your answers ahead.
Table of Contents
1. What is the average salary of an associate in a venture capital firm?
When you want to work as an associate in a VC firm, you probably should first want to know how much you will make? Money is an important question, so we would like to first touch it.
Image Source:- Inc.com
A venture capital associate’s responsibilities are to examine applications from the entrepreneurs’ perspective and analyze potential investment opportunities. Associates have to scrutinize the entrepreneur’s business principles and demand for products/services. One average venture capital associate’s salary is calculated as –
- Basic Salary – $59k – $143k
- Bonus – $3k – $48k
- Profit-Sharing – $1k – 50k
- Total Salary – $59 – $161k
2. How much can a partner make in a medium-size venture capital firm?
Venture capital is an opaque industry, so most people don’t know how much a VC partner makes averagely. To provide a correct answer, team Colitco found a solution from the survey conducted by J. Thelander Consulting.
Image Source:- Techcrunch
The survey was conducted among 172 male and 32 female partners; the average general partner can make $634,000 annually. The average profits depend upon the size of the firm. Partners working in the virtual capital firm under $250 million assets will make less as compared to the larger firms.
3. What are the top venture capital firms?
There are plenty of different venture capital firms available around the globe, but the only handful is the best. According to the algorithm data-driven by CB Insights partnered with The New York Times, the top ten VC firms are –
- Andreessen Horowitz
- Index Ventures
- Sequoia Capital
- Bessemer Venture Partners
- Founders Fund
- GGV Capital
- Tiger Global Management
4. Which are the best venture capital firms in India?
The Indian startup ecosystem is flourishing swiftly. Since 2015, over 650 venture capitalists have funded startup projects in India. VC firms are recognized by SEBI in India, so it is turning out to be the best way to fund small businesses. If we focus on the best VC firms in India that have invested in the leading startups, we have to talk about –
- Accel Partners – California based VC firm, invested in Myntra, BookMyShow, Flipkart, etc.
- Nexus Venture Partners – Funded in Craftsvilla, Shopclues, Snapdeal, etc.
- Sequoia Capital – Another popular California based company, part of Zomato, JustDial, etc.
- Kalaari Capital – It is an Indian venture capital with investment in Myntra, ScoopWhoop, Snapdeal, etc.
- Blume Ventures – The company has funded over 60 startups, including HealthifyMe, Cashify, Belong, etc.
5. How can one get a job in a venture capital firm?
If you want to get a job in a venture capital firm, you have numerous ways to get it. To get a job in a venture capital firm, you can try the following methods –
Image Source:- Getfive.com
- Master a Niche – With the basic academic knowledge in a field, you can gain theoretical as well as practical job experience to become a venture associate. For instance, if you have been working as a CTO for the past few years, you can become a technical professional in a tech-based venture capital firm and start your career.
- Work for Startup or Start One – The great way to contact venture capital firms would be starting your own startup or working for one. You can find angel investors for startups and share your startup idea with them to start your project.
- Become Investor – If you have resources, you can use platforms like AngelList and make investments in the startups. There are plenty of different angel investment opportunities available in the market that you can use to become an investor.
- Stay Motivated – Getting a job in a venture capital firm can take years, so don’t lose your hope – keep on building your portfolio and hunting for jobs.
6. How to find an angel investor for my first startup in India?
If you are going to launch your startup firm to knock at venture capital firms’ doors, you need to find the angel investors for the startup first. Usually, angel investment opportunities are available at the following places –
- Search Locally – You should prepare a list of all the angel investors for startups available in your locality. Mostly, investors want to take part in the day to day operations of the company. Thus, it will be more accessible for management purposes if you look for local investors.
- Ask Around – Your connections can refer you to an angel investor, so you should ask your business associates, colleagues, friends, or family members for a recommendation.
- Attend Investors Events – If you are looking for suitable investors, they are also looking for profitable investment opportunities. Thus, you should attend events, seminars, or boot camps to pitch your idea to potential investors directly.
- Search Online – You can go online and search investors on websites like the Angel Capital Association, Gust, etc. You can also build a strong social media community to fish out angel investors.
7. How do entrepreneurs share profits with angel investors?
When you are inviting angel investors to fund your project, you agree to share equity with them. Initially, investors’ motive is to make your business profitable and later on worry about money. The angel investment opportunities with high returns and lower risk – mostly attract investors.
So, in a nutshell, one investor is liable for the equity paid by him or her in the company. Usually, these terms are discussed at the beginning of the investment agreement.
In this article, Colitco’s editorial team has touched on all the vital questions that every aspiring venture capitalists should know to find good angel investment opportunities. We hope that you have gotten a gist of venture capital firms by now, but if you have any specific questions, you can reach us anytime.