💸 Venture Capital

Venture capitalists are basically the cool, rich aunts for entrepreneurs: they're willing to take on more risk than banks and traditional investors.

This whole concept sounds fun unless you're looking to balance your financial portfolio by investing in the new 'Netflix'.

Then moving onto corporate banking might be a better fit.

. . . Now, for those who are truly interested:

💡Venture capital, a sub-sector of private equity, is about investing in startups for some shares and equity. It's similar to playing in the stock market, but with privately-held companies instead.

The catch?

In a portfolio of 25 companies, approximately 2-3 yield their returns. (The rest go down as losses.)

Then why are you talking about it?

Truth be told, no one actually likes working in a 9-5 under boomer bosses 'till they retire. Startups provide much more engaging opportunities since managing a collection of risk-reward ratios leads to superior returns. 🎈

Just make sure your portfolio has a mixture of low-return low-risk and high-return, high- risk projects at work and in life.

That's cool, but how do I get in?

In 3 steps:

1) Learn everything you can about VC through extensive research. (Don’t worry, we've got you covered.)

2) Build a founder/investor network and participate in local meetups and events

3) Build an online presence

🔺Despite the fact that scouting and fellowship opportunities exist, it is usually preferred for entry-level analysts to have an MBA. (Yes, you'll mostly work with data and spreadsheets at the beginning.)

🔺In order, the funding stages are: Pre-seed, Seed, Series A, Series B, and Series C+

When starting out, here are examples of funds you can get into:

⚫ Established Funds: Big organizations with longer track records and multiple funds backing them up.

⚫ Emerging Funds: Smaller funds, but they can offer you invaluable experiences and opportunities to shape the direction in which the fund is headed.

⚫ Early-Stage Funds: Funds that invest small capital in the pre-seed and seed stages based on the startup's team and business model.

⚫ Late-Stage Funds: Funds that invest larger capital in industries with high growth potential based on financials, revenue, & traction.

International Fellowship Program:

https://www.genzscouts.com

Platform for Job Opportunities:

https://gen-z-vcs-jobs.pallet.com/jobs

This Week's Podcast Episode:

South Asian women in VC:

When it comes down startups, you generally hear about India and not much about its neighbor, Pakistan.

So allow us to present Kalsoom Lakhani and Misbah Naqvi: the Pakistani founders of i2i Ventures, which started with a belief that the next leaders come from unexpected places.

Kalsoom mastered in politics and worked in venture philanthropy before launching i2i with Misbah, who left her job at Bolero, a fintech startup, to join the advisory council. Previously, Misbah finished her MBA and only worked in finance.

Lakhani launched the first accelerator program in Pakistan which helped entrepreneurs in batches rather than companies. The first batch came in 2012, and the program was held in the Lahore University of Management Sciences which lent them a space for free.

People showed a keen interest in investing in these startups, which led to a strong angel investor community.

What does i2i do?

They invest at the seed & pre-seed stages by evaluating each potential and market opportunity.

Vision:

While poverty and education issues do pose a problem, these 2 brilliant women believe that Pakistan has the building blocks for startups to thrive. After all, the bigger the problem,

the bigger the market.

*****

Other renowned venture firms in Pakistan include:

**Credits: Thought Behind Things by Muzamil Hasan

The Most Important Term:

Due Diligence:

a process in which the investor gathers as much information as possible about the company to identify risks and assess its potential.

The factors which mainly affect the investor's decisions are:

1. Size of the market opportunity

2. Quality of the team

3. Strength of the company's intellectual property

4. Financial health

A Few Extra Resources:

That's it for this week!

(Maybe these sudden memes are ruining the aesthetic, but does it really matter?🗿)

Signing out,

The Rundown Team.