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In Part 1 of this two-part series, we take a look at how to get started with building a Venture Capital Firm from the ground up.

All around the world, people want to become Venture Capitalists. This career path is not easy and requires a lot of time and effort, but it can be quite lucrative when done right. Read on to find out what steps you’ll have to take in order to start your own venture capital firm.

Gain Investing Experience

Being a Venture Capitalist is, at the simplest level, being a high-level investor. People can invest in companies with a few dollars, but VCs will be utilizing much more money than that. Before you can even dream of investing at the level of a VC, you must prove yourself as an investor on your own. It’s not a bad idea to first try out investing in the stock market, even though this isn’t the end goal, as you’ll learn a lot about business operations, financial reporting, and how to evaluate a business’s practices to determine whether it’s a sound investment.

After you have some experience on a smaller scale, you should begin looking into small, private companies you would like to invest in. Meet with the founders to learn more about the business and think about whether you believe the company will grow enough to be worth your investment. Keep in mind that many of these startups will need much larger investments, as they are getting off the ground and need capital upfront. If you are uncomfortable investing tens of thousands of dollars (if not much more), being a VC is not for you.

However, if you choose to go on, just know that this is the start of your investing. The company may succeed or fail, and either way, it will go on your track record. Once you have a solid portfolio of profitable business that has made you back most of your money, it’s time to move on to the next step.

Head over to Part 2 to finish reading about the process of starting a Venture Capital Firm.