Venture Capital Series: What’s it like to be a venture analyst?
This week we continue our deep dive into the inner workings of Indiana venture capital firms and professionals. A few weeks ago we profiled Jackie DiMonte, a Sr. Associate with Hyde Park Venture Partners who serves the firm as a venture analyst.
Today we meet two new up-and-coming venture analysts, Nathan Hahn and David Steckler with Elevate Ventures. As venture analysts, they are responsible for focusing on market research and investment due diligence for prospective companies, as well as secondary engagement in providing solutions for existing portfolio companies.
Elevate Ventures invests in high-growth companies with an Indiana presence that are fundraising for their pre-seed, seed, or Series A rounds. Industries of particular interest to Elevate include B2B tech, B2C tech, drug development, manufacturing/energy/defense, and medical device/diagnostics. They typically avoid businesses that have little to no growth opportunity; however, Elevate’s dual approach allows their network of advisors and entrepreneurs-in-residence to offer significant support and feedback to entrepreneurs whether or not they receive funding from the firm.
What prepared you for this role?
Nathan: My coursework in economics and finance at Huntington University, as well as my internships have helped to prepare me for my current position.
David: A rigorous course load of mathematics and economics courses at Denison University in combination with internship experience in the financial services industry.
What are the Indiana tech companies that you track?
Nathan: Elevate has nearly 250 companies in our portfolio. Over 50 percent is in tech-enabled solutions or products. Many well-known tech companies such as Sigstr, Bostra, Lumavate, hc1.com and Springbuk, just to name a few, are in our portfolio, which we actively track. Others are also on our radar for potential future engagement or investment opportunities.
What do you look for when you’re tracking/analyzing a company?
Nathan: For prospective companies, we look at team, market, product, customers, and return.
David: I agree, and I’d add that the team is one of the most critical elements of a young company. It is a make-or-break element of success, even more so than the product or service that the company is looking to sell. For existing portfolio companies, we track several different metrics including financial performance, investment activity, management changes, and goal fulfillment on a quarterly basis.
How much of your job is spent at a desk and how much is spent traveling and/or at events?
David: Most of my work as an analyst is done at a desk. However, I do take opportunities to attend events in central Indiana, particularly those sponsored by Elevate Ventures. Constant engagement with the entrepreneurial community is critical to my success as a venture analyst.
How do you interact with other people in your firm? What do they expect out of you?
Nathan: As an analyst, I do a lot of collaborating with other team members around Elevate. I work particularly close with other members of the investment team, and I report directly to the Chief Investment Officer, Ting Gootee. Other team members expect us to deliver timely and accurate data, as well as thorough diligence work for potential investments.
David: I’m constantly engaged with other team members at Elevate, particularly members of the investment team. I’m also regularly engaged with Elevate board reps and Entrepreneurs-in-Residence. The depend on me to contribute to reporting on our portfolio companies.
If someone is interested in becoming a venture analyst, what would you recommend they do?
Nathan: Get some sort of experience in finance, banking, or a similar field to have the financial background necessary. You can learn and develop many of the requirements for this job, but it is extremely beneficial to have the financial background to go along with the skills you will obtain. Although I am a recent college grad and don’t have years of experience under my belt yet, I am learning a lot through the hands-on exposure I receive with Elevate. Since we are a relatively small company, I wear many different hats and have a lot of variety in the work I do. It is important that I learn quickly and learn from my mistakes as I progress.
David: The opportunity to be a part of a company — whether it grows and succeeds or even fails — is a unique learning experience that offers a solid foundation for performing work as a venture analyst. Understanding the ins and outs of a business from on-the-job experience in a startup offers support for understanding businesses beyond what the numbers say.
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