What I Learned From a Summer in Venture Capital
Lessons for Founders and Investors & My Experience Working in VC
First off, I recognize how late this is, seeing as summer ended nearly five months ago.
However, during these past few months, I found myself feeling reflective. So in an effort to kickstart this Substack and given how sought after a career in venture capital and startups are at my school, I figured I’d share some of my insights after spending this past summer interning at a VC firm.
First, The Backstory
Coming into this summer, I had worked on a VC education program at Stanford through a school club and was hoping to spend my summer in one of two places:
At a startup
Working for a VC firm
Over winter break last year, I had gotten connected to one of the associates of a Seattle venture capital firm called FUSE. After meeting their 5-person investment team individually over the next couple of months, I found myself with an opportunity to work there for the summer.
Quick ‘About FUSE’
FUSE is a venture firm that was founded in 2020 as a spin-off of a larger Seattle VC fund, Ignition Partners, which invested early in some pretty neat enterprise software firms (Apptio, Splunk, Cloudera, DocuSign). Over the summer, FUSE was investing their $250M Fund II, and they primarily focused on AI enterprise software, writing $500K to $12M Pre-seed, Seed, and Series A checks.
My Experience
When I first read through FUSE’s portfolio, it was a bit daunting: I could barely even understand what a lot of those companies did. Most of them used AI to automate some industry-specific tasks (think software that helps hospitals manage patient records more efficiently or tools that streamline supply chain logistics). When I first started working, I was worried about how I could provide value—not only because I was just an intern, but also because of this apparent prerequisite. I had nightmarish visions about one of the partners asking me my opinion on something and I just wouldn’t have the faintest idea of what to say.
Thankfully, that nightmare never came true. However, there were a couple of things that I quickly realized as soon as I started.
The investment team was far more knowledgeable than people outside VC often give them credit for—even though none of them had a technical background. All three of the partners came from investment banking backgrounds and had transitioned over to venture capital, which they had now been doing for the better part of a decade.
The firm had some very well-connected and powerful relationships—mostly through their LP network—and the operating partners are also former juggernauts: one was an early direct report to Jeff Bezos and led Amazon’s selling of movies in the early 2000s, and the other was the former CFO of Microsoft.
Because of these two things, I came away from this summer with a handful of wonderful lessons learned from those who do it best, lessons I know will continue to serve me beyond this internship. Hopefully, they provide some semblance of utility to you as well, reader :)
Lessons for Founders:
1. Building a venture-scalable business is HARD
On one of my last days of work, one of the partners gave me a last-minute assignment: he told me to look through the list of YC’s Summer ‘24 cohort and find the five best businesses that I think had the highest likelihood of success. He then sent a calendar invite in which it said we’d be “talking startups”. Unsure where this was headed, I dutifully completed my assignment and the following day, proudly came to him with five of those 200+ companies that I could reasonably predict would have a huge exit, IPO, or become a legacy company. Unfortunately, my excitement was short-lived. For every company and every reason I provided, the partner gave me three more why that company wouldn’t succeed. This companies who, to me, felt hyper successful, the partner wouldn’t even glance at.
The point of this exercise, as the partner went on to explain, was to show how difficult it is to survive as a venture-backed startup. YC, which felt to me like basically a guarantee of some success (dropping out to do YC is a big flex at Stanford), also was mostly dead companies that had questionable red flags.
Even in a place like Silicon Valley where there is lots of funding, seeing “YC [insert cohort]” all over your LinkedIn from your connections is a biased sample. It’s extremely hard to get funding, and exponentially harder to execute off of it.
2. Listen for Worldly Audaciousness
Kind of in conjunction with the first bit of advice, as a founder, you need to be riddled with audacity—especially in the context of where you think the world is heading. VCs' ears perk up at bold predictions and high enthusiasm because that’s associated with steeeeeeeep returns. But from a psychology perspective, if an investor is giving you money, they’re going to want clear signs that their money is going 100 miles in the right direction. It’s your job as the founder to convince them of that, and that starts with vision, introspection, and having a pulse on the landscape of technology.
3. Hiring is why most of FUSE’s failures failed
Towards the end of my internship, I asked one of the associates out of curiosity why the lower performers in the portfolio hadn’t been able to grow. He immediately responded that hiring could be attributed to 95% of their failures.
Since FUSE operates in the early stage, a lot of their investment decision hinges on the founder “vibe”. Getting funding isn’t how I would define success, returning it is. And in order to do that, you have to bring on the right people. Brian Chesky, CEO of Airbnb, advocates for more intensive hiring practices for startups, treating it as more of network building and relying heavily on references.
Lessons for Investors
1. Curiosity is mandatory; bring a perspective
I found a lot of my day to day to be research-intensive, which I wasn’t expecting. This forced me to shift my mindset to look towards interesting concepts within whatever I was researching, regardless of industry.
Take OT cybersecurity (securing big industrial machines like manufacturing equipment). I didn’t even know that this was a thing until I was asked to write up a research memo about the space. While doing this kind of research can be dull at times, I found that keeping two things in mind was helpful and/or motivating:
It’s a privilege to be researching these companies for your job, where you have hundreds of millions of dollars of money that very smart and accomplished people have trusted you with.
You could theoretically find the next many-billion-dollar business in your research.
The second half of doing research is deriving a conclusion. Even though I was just an intern, the people at FUSE were always down to chat about some industry trend or phenomenon. During our weekly roundup meetings, they listened to the companies I sourced and met with. A big key was demonstrating nuance; show that you have thought deeply about an investment decision before it’s time to talk about it.
At the end of the day, while the members of the firm have serious expertise, it’s still just really hard to predict the future in the venture business. As a result, I would say especially to someone interning at a VC firm: don’t feel afraid to bring a perspective to the table. It’s how you learn!
2. Venture Capital is a Relationship-Driven Industry
The three partners were some of the most well-connected people I had met. Our LP database consisted of lots of institutional investors, but also many high net worth individuals from Microsoft, Amazon, Goldman, Morgan Stanley, etc.
Beyond the LPs, one of the partners would always say around the office “No stone left unturned”. FUSE’s goal was to meet every enterprise software company coming up out of the Pacific Northwest, and for the most part, they did. It was uncommon to find a newly funded startup on Pitchbook for a given day that FUSE had not met with.
The value of relationships even extended into FUSE’s own portfolio companies. A big part of supporting companies they’d invested in was finding key hires for them. If anyone at the firm knew a VP of Engineering or a rockstar Head of Sales looking to join a startup, FUSE would connect them with the company.
The moral of the story is that if you’re looking to enter into the venture world, networking has to be in your DNA, as terrible as that sounds. One of the associates would routinely host happy hours for founders and attend Seattle Tech Entrepreneurship events to meet founders and stay in touch. It’s definitely a grind in its own right, but based on the relationships that the partners have built all over the Washington tech scene, it seems to pay dividends.
3. Patience Keeps You in the Game
On the last day of my internship, I had coffee with one of the partners, and this was one of the tidbits of the conversation I took away. As I mentioned earlier, VC is a world where most of your investment outcomes are losses. This particular partner had the mindset that the scarcity of wins motivated him. According to him, if wins were in abundance, each one wouldn’t be as special.
No investor is guaranteed a win, but by quitting you definitely guarantee a loss (casino gamblers, please ignore this).
Ultimately, I emerged from my internship filled with immense gratitude. Super huge shoutout to the partners, Cameron Borumand, Brendan Wales, and Kellan Carter, as well as the associates, Zane Khatib and Nolan van Nortwick. They’re great people with deep knowledge and incredible expertise.
At the end of the day, working in venture is a hard job. Wins are rare, and curiosity and networking are imperative. However, I had ample opportunities to learn about a variety of industries and talk to incredible engineers and operators working on exciting enterprise software companies. Very consulting-esque in that regard.
Ultimately, venture capital is about balancing audacious bets with patient curiosity. Whether you're a founder or an investor, it’s an industry that rewards bold thinking, relentless learning, and the relationships you build along the way.
About The “Author”
I’m a Stanford undergrad studying Computer Science and Economics, and I’m not an avid writer at all. However, I’m using this page as a way to a) give advice on what I’ve experienced, b) talk about the things I find cool, and c) try something new! I’ll also be sharing my experiences at school (highlights and lowlights), as well as things I’ve learned from working in SWE, VC, and consulting. Thanks so much for reading, and feel free to shoot me an email (naikdhr@stanford.edu) or a LinkedIn message with questions or feedback :)