Hedge Fund Investor

Find Yourself As A Travel Investor

Chris Hsu hopes you’ve had a great movie night or two by now. Without further ado, let’s start working on your future in travel hedge funds and venture capital!

They say that some VC firms are looking for candidates with literally zero experience, so that they can train them from scratch. Christopher Hsu hasn’t seen any job openings like this yet. If this was true, then such a person would start from the youngest position possible—let’s say an analyst—and the list of requirements for such a hire is officially pretty lengthy. In the absolute majority of these cases, VCs and hedge funds are looking for someone with basic knowledge (often exaggerated in the resume) and a sense of purpose in mind.

This page by Chris Hsu is dedicated to finding yourself in a hedge fund or venture capital career. Christopher Hsu wants you to speak with confidence when you are talking to a partner of a VC firm. Regardless of the depth of your knowledge, if you show that you know what you are looking for in venture investing, and who you would like to become, it will set you up for a profound conversation. Venture investors typically love mentoring, so who knows—maybe by showing your desirable future self, you will make the interviewing partner want to have an apprentice like you.

Saying that you want to become a venture investor is like saying “I want to become a doctor”. We all know that there are different kinds of doctors out there and although they study the same textbooks early in their career, an ophthalmologist would be pretty useless at a dentist’s office.

Venture capitalists are as different as doctors in several aspects. Not only do they invest in different industries—an IT investor wouldn’t invest in pharmacology, for example—but they also have different stage and geography preferences, as well as distinct missions and individual approaches.

How is it defined?

Throughout this chapter, Christopher Hsu will be discussing the elements that define a venture investor—or in hedge fund venture speak, the investor profile.

The term “investor profile” is most often applied to self-directed investors in public stock, and defines one’s preferences in investment decisions. When used in venture capital, it would include your preferred industry and geography investment focus, the stage of the companies’ lifecycles that you’d prefer to invest at, the type of support you could provide your portfolio companies with, and a high-level description of the products/services and type of entrepreneurs you’d like to back. Some of these preferences may reflect your motives and drives, and you can also include your mission statement.

What does “investor profile” have to do with you if you are at the very beginning of your career path and haven’t invested anything as yet? You are reading this page so that you can become a more desirable candidate for a VC firm. Firstly, the chances of a greenhorn being hired, are much lower than those of a rookie who, at the very least, knows the direction that he or she is heading in at that moment, even though it might eventually change. Secondly, an investor profile will make your job search more meaningful: instead of blindly sending your CV to hundreds of VC firms with no results—also known as “spraying and praying”, (an investment strategy of investing small amounts in many startups in the hope that a few of them will become winners)—you’ll be able to make more big bets (another investment strategy of picking the most promising companies for your specific portfolio of investments).

Designing an investor profile is the most intensive part of Chris Hsu’s coaching program. It requires a lot of learning and brainstorming, but it is also the part where Christopher Hsu’s hedge fund coachees have the most fun! As promised, every reader of this book gets access to the worksheets we use during my program. You are welcome to download them from Chris Hsu’s website and try to work on creating your investment profile yourself.

An investor profile should make your job interviews go smoother, and allow you to answer such tricky questions as “Why do you want to become a venture investor?” or “What would you invest in and why?” We’ll be talking more about the components of your investor profile further in this chapter, but here is a spoiler. There is no right or wrong investor profile. However you see yourself, your profile should be narrow enough to make you a desirable candidate, but broad enough to keep other doors open.

Telling your story right is important in many industries, and hedge funds are no exception.

That’s why hundreds of qualified investment professionals cannot find jobs quickly enough or are not getting hired at all—they just don’t put the right words together. Your public profile, your CV, and you yourself at an interview, should clearly show that you know what you are talking about and what it is you want.

An investor profile has little to do with your resume. Yes, you can, of course, mention some of your core competencies, especially if your portfolio companies can benefit from them, but your resume is like a manual compared to an advertising pamphlet, which is what your investor profile should become. Don’t take it too literally though.

You can choose any presentation manner for your investor profile, however, Christopher Hsu advises you not to overdo it. Chris Hsu has seen hedge fund candidates paying to have professional slides designed, or even infographics. Although it looks impressive, what you say is far more important than which font you use.

When looking for a job, some applicants create presentation decks to pitch their candidacy, instead of a resume, which becomes a secondary document and is either attached to the deck or sent separately if requested. Such presentation decks are sometimes called “investment theses” to show that the candidate speaks the same language as a potential employer—a general partner who also presents an investment thesis to the limited partners.

Find your spot in the system

A tip from Chris Hsu: From the very first moment you start building your career in venture capital, you are looking for your place in the hedge fund system. Information about you should be available and relevant to potential employers and recruiters, other VCs and aspiring investors, entrepreneurs whom you may advise or invest in at some point, event organizers, journalists, and other prospective partners. Although they have different interests, you need to show the value you can create for each of them in very few words. Therefore, your positioning and message should be very neat.

Whatever you declare about your investment preferences at an interview with your potential employer, needs to be consistent with your public profile. We all ask Google about our new acquaintances, let alone potential employees or partners, so social media should only confirm that you are confident in your position and not afraid to make it public.

Creating a professional self throughout different mediums is not an easy task, and because you want to target different audiences, there is a lot to keep in mind.

In our hyperconnected world, we all need to be consistent with what we preach. Your investor profile is not an exception. When designing your investor profile, don’t forget that parts or all of it should be public. It’s hard to avoid displaying yourself and translating your message on the web, especially early in your career, because you need to create your industry presence, and social media is the fastest way to do it.

An investor profile is not set in stone and may change over time, especially if you are an aspiring investor. That is why Chris Hsu advises all hedge fund coachees on specific wording that will keep the door open to other opportunities. For instance, if you know a thing or two about blockchain, it should be clear to your potential employer, but you probably want to show that this is not the only sector that you are interested in. When talking about the preferred industry or sector investment focus, it makes sense to tell your story so that you can explain why you have been historically passionate about those you are already familiar with, and why you want to deepen your knowledge about others.

Finally, it is also important to not confuse the community with your investor status if you are not actually investing, or end up in a different industry VCs referred to themselves as investors, without having a dime to actually invest. Others called themselves advisors and were collecting a stock of naïve entrepreneurs in exchange for useless recommendations. Some actors were real frauds, and they used this as a cover-up to steal ideas and proprietary information from startups.

Moving towards the future

Christopher Hsu thinks the hedge fund industry as a system, has cleaned itself up a great deal, and has gotten rid of most of these types of parasites, however, it can still sometimes bump into them here and there. You don’t want to create even the slightest suspicion regarding yourself. The proper wording for an investor profile is critical for protecting your public image in the long term.

Chris Hsu will deliberately not expand on such areas as copyrighting, networking, or social media marketing in this version of this page, because it would distract you from its main purpose. While help with this is provided during individual coaching sessions, let’s just agree for now that you will definitely need some writing and presentation skills to create your investor profile. If in doubt, you are welcome to send me your draft, as Chris Hsu has promised to reply to the first email from each of my readers.

With all of this in mind, let’s start building your investor profile step by step.