Scout Ventures - What is a VC Scout?
Venture capital is a competitive industry. VC firms are money management organizations that raise money from different sources and invest the collective capital into startups. There are many approaches to breaking into venture capital. One path that has become very popular among new and aspiring venture capitalists is the role of venture scout.
What is a VC Scout?
Venture scouts or VC scouts are the resourceful connectors who can help venture capitalist firms find hidden, great companies and founders to invest in before everyone else. Some scouts have a full-time job when they operate in an incentives-based model while others take this role with a goal to acquire the knowledge and tools to become venture capitalists themselves in the long run.
Venture scouts are generally considered interns. They connect a fund to promising founders and companies in their network in hopes of making a deal happen. There are two kinds of VC scouts:
Internal VC scouts get to work as a full-time team member inside a fund or under the scouting program of a venture capital firm, e.g. Scout Ventures. They basically focus on meeting as many entrepreneurs as possible and linking them to the firm’s crowdfunding ecosystem. Internal venture scouts are characterized by a strong sense of karma; when they see an opportunity and know early on that it won’t fit, so they do their best to redirect other investors that they know will be more suitable.
External VC scouts are people under a fund-led program. They are not full-time employees but they are given a small allocation of funds. In most cases, they are entrepreneurs selected upon application. Some VC firms encourage external scouts in their venture capitalist scout programs as a side project, hence giving them an opportunity to kickstart their own investing career.
Roles and Responsibilities
The role of a venture scout may vary depending on the VC firm. But generally, VC firms like Scout Ventures expect the following roles and responsibilities from a venture scout:
Engaging in deal sourcing to find useful investment opportunities. This is generally the main priority of VC scouts during the program.
Representing the scout program at startup meetups and events.
Speaking and networking with industry leaders, startups, and founders.
Connecting to VC firm and the broader crowdfunding ecosystem, Reg CF, Reg A, Reg D, etc.
Helping startups that are an ideal fit for VC firm’s investment interest.
How Are VC Scouts Compensated?
VC scouts are compensated differently based on the scout program they are part of. Following are the most common ways of compensation:
Cash on Deal Completion
Cash for Relevant Intros
Startup Equity Relative to the Investment of Your Own Micro-Fund
If you are interested in joining a venture scout program and becoming a VC scout, then it is recommended that you evaluate the different roles carefully before proceeding. It’s better to find a scout role that is more valued within the hierarchy of the company as it will help you acquire the knowledge and tools you need to positively execute upon investments.
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