7 VC Myths Busted: What Really Happens in a Day in the Life of a Venture Capitalist

ou’ve probably seen the memes of VCs “working hard” while jetting off to Lake Tahoe or spending a week at Burning Man. So you’re wondering - what the heck do VCs really do? 

The venture capital industry is often misunderstood. While there’s no doubt that VC work is dynamic and can be exciting, it also involves a lot of hard work, careful analysis, and detailed planning. 

This article will debunk some of the most common myths about the VC profession and take a look at what a day in the life of a VC really looks like.

VC Myth 1: VCs Spend Most of Their Time Chatting to Founders

Reality: It’s true that interacting with entrepreneurs is a key part of the job, but it’s only one aspect of a VC’s daily activities. A significant portion of their time is spent on tasks that are less visible but just as important to making informed investment decisions. So what’s a typical day like? 

A typical day for a VC might start with a review of the day’s schedule, which could include internal meetings, discussions with portfolio companies, and calls with potential co-investors.

One of the core activities is due diligence—the process of evaluating potential investments. This involves analyzing market trends, reviewing financial models, understanding the competitive landscape, and conducting reference checks. Each of these tasks requires deep focus, often taking up much of the day.

Due diligence is not just about numbers; it’s also about understanding the people behind the business. VCs need to gauge the founding team’s ability to execute their vision, manage a growing company, and navigate challenges. This requires both quantitative analysis and qualitative judgment, in other words financial expertise along with a deep understanding of human dynamics.

VC Myth 2: VCs Only Care About High-Profile Startups

Reality: The media often highlights the involvement of VCs in flashy, high-profile startups, giving the impression that these are the only companies VCs are interested in. In truth, venture capitalists consider a wide range of opportunities, many of which may not be in the spotlight.

They often work with early-stage companies that are still in the process of defining their products and markets. These companies may not be well-known, but they hold massive growth potential. The challenge for VCs is to identify these opportunities before they become obvious to everyone else. 

This involves a lot of research, networking, and industry expertise. VCs need to be constantly aware of emerging trends and technologies, which means a good portion of their day is spent reading industry reports, attending conferences, and engaging with thought leaders.

Moreover, venture capitalists don’t just invest in technology startups. Depending on their firm’s focus, they might also look at companies in industries like healthcare, consumer goods, or clean energy. This diversity requires VCs to be knowledgeable across various sectors, which adds another layer of complexity to their daily work.

VC Myth 3: VCs Make Quick Decisions About Investments

Reality: The image of a VC making a snap decision to invest in a startup after a short pitch is pretty much a myth. In reality, the full decision-making process is thorough and can take weeks or even months.

When considering an investment, a venture capitalist will go through multiple rounds of discussions and analysis. This includes several meetings with the startup’s founders to understand their vision, strategy, and execution plan. The VC team will also conduct in-depth market research to validate the startup’s market opportunity and competitive positioning.

Financial projections are closely studied, and assumptions are challenged to ensure that the business model is sound. Legal due diligence is also performed to identify any potential risks, such as intellectual property issues or regulatory concerns. Throughout this process, the VC must balance the need for thoroughness while also moving quickly enough to secure a deal before competitors do.

Something many people don’t know is that decision-making in venture capital is often a collaborative process. Partners within the firm will discuss the pros and cons of the investment, bringing different perspectives to the table. This internal dialogue is critical in ensuring that all aspects of the potential investment are considered.

VC Myth 4: VCs Only Focus on New Investments

Reality: While sourcing and securing new investments are important, managing existing portfolio companies is just as important. In fact, a big part of a VC’s day can be spent working with the companies they’ve already invested in.

Venture capitalists often take on an advisory role with their portfolio companies, providing guidance on strategic decisions, overcoming challenges, and sometimes even assisting in hiring key personnel. This hands-on involvement can be vital to the success of a startup, as the VC’s experience and network can open doors that might otherwise remain closed. After all, that’s the whole point of having a VC, other than capital! 

VC Myth 5: VCs Work Alone

Reality: The truth is that venture capital is highly collaborative and involves a lot of networking outside of the office.

VCs work closely with their colleagues within the firm, often pooling their knowledge and insights to make the best decisions. This collaboration extends beyond the firm as well. VCs frequently co-invest with other firms, which means they need to maintain strong relationships within the venture capital community. Networking is a big part of the job—not just to find new deals but also to strengthen ties with other investors, industry experts, and potential partners.

On any given day, a VC might attend industry events, participate in panel discussions, or meet with other investors to share insights and explore co-investment opportunities. These interactions help them stay connected to the broader investment ecosystem and remain competitive. 

VC Myth 6: VCs Always Win Big or Lose Big

Reality: While venture capital is often portrayed as a high-stakes game where VCs either hit it big or lose everything, the reality is more nuanced.

A successful VC portfolio typically has a mix of outcomes. While some investments may result in 100x returns, others might only break even or fail altogether. The key to success in venture capital is diversification—spreading investments across a range of companies to balance risk and reward.

Much of a VC’s work involves managing these outcomes. This includes deciding when to exit an investment, either through a sale, merger, or public offering. Exits require careful timing and negotiation to maximize returns. VCs also need to manage the less successful investments, deciding when to cut losses or restructure the investment to salvage value.

Risk management is an ongoing process in venture capital. VCs must continually assess the performance of their portfolio companies and adjust their strategies as needed. This requires a deep understanding of the business environment, the ability to anticipate changes, and the flexibility to pivot when necessary.

VC Myth 7: VCs Have a Glamorous Lifestyle

Reality: While venture capitalists might attend high-profile events, take a trip to the Swiss Alps, and interact with influential people, the day-to-day reality of the job is often far less glamorous.

Much of a VC’s time is spent on tasks that require deep concentration and analytical thinking. This includes reading through business plans, analyzing financial statements, and conducting market research. These tasks are not always exciting, but they are essential for making informed investment decisions.

In addition, venture capitalists often work long hours, especially when deals are in progress. The pressure to find and secure the best investments, combined with the responsibility of managing a portfolio of companies, can make the job demanding and stressful.

Networking events and industry conferences, while important, are not just about socializing—they are strategic opportunities to build relationships, gain insights, and identify potential deals. VCs need to be constantly on the lookout for new opportunities, which requires both diligence and perseverance.

Venture Capital is Complex

The venture capital profession is complex and dynamic, requiring a combination of analytical skills, industry knowledge, and people skills. While the job can be exciting and rewarding, it also involves a lot of hard work, strategic thinking, and risk management. The myths surrounding venture capital often oversimplify the realities of the job, making it seem either more glamorous or more straightforward than it really is.

A day in the life of a VC is filled with analyzing potential investments and managing portfolio companies to networking and collaborating with other investors. It’s a role that demands a balance of rigor and creativity, requiring VCs to be constantly flexible. 

Ultimately, venture capital is about more than just making investments—it’s about helping to build companies, support innovation, and drive economic growth. For those who thrive in a dynamic and challenging environment, it can be a deeply fulfilling career. But like any profession, it comes with its own set of challenges and demands, requiring dedication, expertise, and commitment to success.