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How Do Venture Capitalists Spend Their Day?

Question: I’m curious. I understand that VCs have primarily four functions they perform: raising funds, screening and investing in new businesses, managing current portfolio companies and some level of investor relations and internal operations. How do you divide your work day? What percentage of time do you think you dedicate to each area? Maybe I’m misguided in the ways you spend your time, and you could clarify how you divide up your many tasks?

Our Take: One of the great things about this job is that there is no “standard day.” Every day is different and the division of time reflects that. It’s really hard to say what a typical day is like. Even typical weeks are hard to describe. It all depends on a particular partner’s portfolio is doing and what their role is in the firm.

There are weeks where 100% of a VC’s time is in managing their current companies. If a company or two of theirs is going down a liquidation path, these are very time consuming activities. Alternatively, if your board meeting schedule shakes out to all fall on one week, this can also allocate most of your time to current projects, but perhaps the next week one could spend 50% of his / her time looking at new deals.

Fundraising is done episodically, not on a regular basis (although some would say that investor relations activities are fundraising), so when VCs are raising funds, a material amount of time goes into that effort, but this is most likely only every 4 years or so. Also note that not all the partners in a firm will have to spend a material amount of their time fundraising.

Some partners have operational responsibilities internal to the firm itself, some don’t. In short, you could ask 100 VCs this answer and have 100 different answers. If you forced me to put some percentages on the table, I’d say a normal yearly time allocation (assuming that fundraising is not happening) might look something like this:

Screening, Analysis and Execution: 45%

Current Company monitoring: 45%

Investor Relations / Operations / Other: 10%

February 27th, 2007 by     Categories: General QandA    
  • http://dscudder.wordpress.com Dan

    Thanks for the answer! Keep up the good writing.
    Dan