This article provides a deep-dive into the considerations around becoming an operating partner at a VC/PE firm. It is part of a broader series by Whispered on Career 2.0 options.
The operating partner role is attractive because it exposes you to both operating strategy and investing. But often these roles end up being short-term.
“Operating partners need to be assertive on how the role can drive impact. If you can do that, the role can be long-term and highly compensated. However, many roles are not structured for long term success.” Top Operating Partner
The operating partner role has grown dramatically in the last 10 years due to the explosion of investment firms, as well as the recognition that these firms need to differentiate themselves on more than just availability of capital to invest. The latest VC Platform survey on operating roles showed that nearly 40% of VCs globally now have some flavor of operating team.
Coming into a firm at the partner level is not realistic for many people, especially for those who don't have any prior relationships with the firm. There are, however, many operating (aka “platform”) staff roles that provide operational guidance to portcos. While the platform role is different at each firm, the following articles provide some context around the general areas of responsibilities typically covered by individuals and teams in this role:
What the role looks like
Typically the operating partner role is focused on helping portfolio companies with strategy and best practices around a specific function (i.e RevOps, sales, marketing, product, recruiting..). You may also be asked to help provide input on executive searches within the portfolio for roles where you have expertise as well as help to build a community of execs in that role across the portfolio (think manage a slack channel and have monthly calls).
The operating partner role can vary widely depending on firm type:
Early Stage (Seed+A): These are often the first institutional investment in a company. Someone in an operating / platform role will need to have “zero to one” startup experience rather than with scale.
Mid-Stage (B+C): Operating partners with VCs are typically “helper” roles designed to differentiate the firm as a potential investor in what is an increasingly overcrowded market of firms. Often these are individual operating partners that roll over more often.
Late Stage / PE (D+): The key about the role is figuring a way to drive impact with portfolio companies. The role exists because it’s hard to make a return without improving the company where it is typically a control position and lower growth. Late stage and Private Equity firms tend to have a long-term committed strategy and operating groups composed of multiple people. Develop original content and POVs for the firm on your specific function. Network deeply within that function’s other communities so the firm and it’s portfolio companies have great access to talent pool
In addition to the stage of the firm, we’ve observed the structure of the operating partner role can vary on several dimensions:
Part Time / Full-Time / Partner: Operating partner roles can range from an entrepreneur/expert-in-residence (short term, usually focused on helping you find your next role, may/may not be paid) to an operating staff role (paid position but serves at the direction and prioritization of the partnership) and a full operating partner (paid of the investing or management company structure, which gives you more authority, autonomy)
How many companies you work with: Some roles can focus on a small group (< 10 companies) and can go deep with them while others can support a broad portfolio of companies (i.e 100+) where you stay high-level and strategic.
Size of Operating Team: At most VCs you might be the only operating partner, or there will be just a few, versus large PE firms can have 25+ person operating teams with more specialization. Note: Visit our VC database to see a list of firms with deep operating teams.
Diligence vs. Portfolio focus: Some operating partners work with deal teams to assess and help close deals while others purely work on improving portfolio company operations.
“On the diligence side, operating partners serve multiple roles to support deals: (1) sourcing through their own network or area of expertise (2) serving as a functional expert to give a deeper read on the possibility of success for a company and (3) selling themselves, and their firm, as the right firm to work with via the opportunity to partner together. Tethering between these three is an important facet of being a successful operating partner.” Aaron Cort, Head of Marketing, Growth & GTM at Craft Ventures
Firm Operations/Marketing: Some operating partner roles can include a healthy dose of content creation and events. This may be less interesting so you’ll want to get alignment early on in your conversations about how much of this they are expecting you to do.
“Being involved in deal processes increases your value. When you help a firm improve their operations, all investors on the cap table benefit. When you help them close a deal all benefits accrue to your firm.” Karan Singh, VP of RevOps @ LaunchDarkly, former Operating Partner
Considerations on the role
Pros:
Variety: You meet many new companies, see a variety of business models and projects. This can open new windows and perspectives.
Comp (Sometimes): This role can pay well and at, the partner level, can include carry. Note that part-time operating partner roles also can pay very little as they are just a place to spend time while searching
Career Stability: This can be stable career-wise (more so than investing partners) if you find the right fit.
Network: Supercharge your network. You meet 10x more talented and experienced people than in a typical operating role - across industries, growth stages, and areas of subject matter expertise. There is also an amazing community of VC operators who tend to be collaborative since they all face similar challenges.
Pattern Recognition: Working with investing partners you will “get a PHd in how to assess companies.”
Candid Information: Get the inside story on companies you might join.
“In my role I have earned my place as a trusted "text or Slack me anytime" advisor to 50+ NYC based CEOs of Seed / A / B / C companies. Where else would I get that level of access and closeness? If I were to go back to operating, I would have the advantage of a "try before you buy" experience with a lot of different CEOs and companies.” Jason Gelman, Operating Partner @ Primary Ventures
Cons:
Skills Get Stale: You aren’t getting your hands dirty with current vendors and tech
Hard to Keep Score: It can be hard to know what "winning" looks like and how your work impacts VC fund outcomes because they are so long term in nature. The highs are not as high as your best day at a startup (and your lows are not as low).
A Partnership Not a Company: There is no single metric (like revenue) that everyone in the partnership rallies behind. In the partnership structure, each partner can have their own side quests that they view as equally important. Culture can help with alignment here, but under stress, a partnership will act very differently than a company.
2nd Fiddle: You are definitely lower in the pecking-order to investing partners. You will be first in line for any budget cuts.
IC Role: Coming from leading a large team may be an adjustment. You will have little opportunity to manage people and instead have to influence others – both inside the firm and within the portfolio. If you love management and leadership this may not be for you.
Help Not Always Wanted: Operating companies might not want your help – in fact, they may view you as a spy for the investor and actively avoid your help.
Limited Resources: Resources (budget, time, staff) are very limited relative to corporate budgets. Your internal data, systems and processes are likely to be below what you’re used to working with in the corporate world. This can be an opportunity for you to demonstrate your leadership, but it can also be a headwind to making progress in your area of focus.
Spread Too Thin: It’s easy to get spread thin between helping multiple portfolio companies, helping on executive searches, helping with diligence, and building a community of executives across one function within the portfolio.
Other considerations
The best operating partners and platform staff have deep startup experience at companies similar in stage and type because they have “seen this movie many times before”. Thus, they know what go-to-market strategy to advise, how to spot areas of improvement from looking at data, and even have a network of connections if help with recruiting is needed.
Revops is a great background for an operating partner. You get to think strategically about the entire GTM funnel and it is very numbers driven
Different firms have different models. Some have the investing partners and operating partners working on same team while others have a separate operating team.
Be careful to make sure your role is focused on portfolio companies rather than improving the operations of the VC itself. This latter bucket can be a dead-end (trying to manage a bunch of partners). This is particularly prevalent for marketing folks
Operating partner is rarely a path to an investing partner role. With fundraising tighter, investing partners are even less likely to share the pie.
How to get an operating partner role
These operating partner roles aren’t typically posted. Here are some tactics to find them:
Experience with firm: If you have worked with the firm in the past (where they invested in your company and worked with you)
Experience at the relevant stage: Firms look for experience in companies at the scale of their investments. If you have only operated at early stage companies, you will struggle to get an operating partner role at a late-stage PE firm.
Partner Relationships: You know a partner well and they have an established operating partner program
Apply: It is rare to see a great operating partner role posted but you can track platform specific job boards such as SoYouWantToWorkinPlatform or VC Platform
Project: Do a project for a portfolio company and rock it
“Doing some advisory calls / project based consulting work for a VC portfolio company and doing a great job earns you a reputation where your name gets bubbled up to the firm and other portcos.” Jason Gelman, Operating Partner @ Primary Ventures
How to evaluate operating partner roles
Below are a few signals that an operating role might be a fit for the firm you’re talking to:
The firm is an “active” investor, meaning they try to earn board seats, own significant amounts of the company and try to provide value beyond just capital.
The firm is early in their latest fund cycle. VC funds have a life cycle of 7-10 years with firms earning the majority of their operating fees (eg revenue) in the first 3-5. Firms that are hiring an operating role shortly before a new fund or in the early years of a fund cycle have more dollars to put towards the role and programming.
The firm has a past history of hiring operators or has existing platform staff such as a head of talent, chief of staff, COO.
Look for strong alignment on operating and management philosophy. This alignment or lack thereof can be one of the strongest predictors of whether the role will be a long term fit for you. Ask questions about what their philosophy is in how they manage their companies and what they expect their operating partners to do and how. Do they have strong rationale for why they are hiring an operating partner or are they doing it because other firms are doing it?
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