Venture Capital (VC) firms play a vital role in the global tech startup ecosystem.

These firms raise funds from various sources like family offices and pension funds to invest in tech startups across different stages and verticals in exchange for equity. Through these investments, VC firms collaborate with founders to help grow the startups with the goal of eventually exiting through acquisitions or IPOs.

This article is aimed at startup founders looking to understand the roles within VC firms, which can help them navigate the fundraising process more strategically. It’s important for founders to grasp the different levels of authority within a VC as it can impact investment decisions.

Christine Bechhold of Empire Angels mentioned in an article on Inc. that VC partnerships can be complex, but there is a general hierarchy structure followed by most firms. It’s advised for founders to ask questions and clarify any doubts when interacting with venture capitalists.

A typical VC has both an investment team and a support team. The investment team focuses on scouting and investing in high-growth tech startups, while the support team provides assistance in areas like marketing and operations to both the VC firm and its portfolio companies.

Also Read: Pitching 101: Questions that VCs will ask you during a pitch session

Here is a breakdown of common job titles within a VC, starting from the junior roles:

Analyst

Analysts are entry-level members responsible for research, due diligence, networking, and outreach to potential investees. They typically hold pre-MBA degrees and may move on to roles like Associate or pursue further education or entrepreneurship after a few years in the position.

Associate

Associates analyze business plans, conduct transactions, and assist in decision-making by filtering out companies for investment consideration. Senior Associates, usually post-MBA, can influence decisions and progress to more senior roles after a few years.

While Analysts and Associates may not have final decision-making power, their roles are valuable to the VC firm’s operations.

Principals are senior members with significant influence, involved in identifying new opportunities, negotiating terms, and managing portfolio companies post-investment. Their success can lead to promotions to Partner roles.

Partner

Partners are top decision-makers within a VC firm, owning the firm and overseeing investments. They are responsible for investment decisions, exits, board memberships, and represent the firm externally. They report to the Investment Committee on fund performance.

Within a VC, there can be General Partners who invest and manage the fund, and Limited Partners who provide capital without involvement in day-to-day operations.

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This article was originally published on December 22, 2021.

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