July 1, 2020

‘Codecademy for VCs’ launches

Merit, a new, free VC training programme launches today — and hopes to offer a scalable solution to the VC industry's diversity problem.

Amy Lewin

6 min read

If you want to get an internship at a venture capital firm, it often goes like this: you ask your dad who’s an investor or your mate from business school who’s a VC to get you one — or you just don’t get through the door.

Merit, a new kind of training programme for wannabe VCs which launches in beta today, hopes to offer an alternative — more meritocratic — route in. 

On the platform, participants will source startups and analyse markets, just like ‘real’ VCs, and gain points through peer reviews of their work. The top performers will then be introduced to VCs — not because of where they went to school or who their parents are friends with — but based on their own abilities.

If we want to make the whole startup ecosystem more diverse, we can’t take VC recruiting too lightly.

“I fundamentally believe that diversity is one of the biggest issues we need to tackle as an industry,” says Jacob Claerhout, an analyst at French VC firm Partech and founder of Merit. “If we want to make the whole startup ecosystem more diverse, we can’t take VC recruiting too lightly.” 

Merit is a compelling concept. Whether VC firms pay attention is another matter.

The way in

Over the past few years, a flurry of new VC training schemes have launched. Some, like San Francisco-based GoingVC, offer structured training programmes for a chunky fee ($5,999). There’s also MemoHub, a four-week programme which helps people prepare for a VC internship (€300). 

“You pay just to feel part of something — I have a philosophical problem with that,” says Claerhout.

Jacob Claerhout, Merit's founder

Others focus on improving the diversity of the VC scene. Future VC launched a five-week internship programme in 2019, which gave 20 interns a chance to learn the ropes in placements at dozens of UK-based VC firms — and paid them at least London living wage. This year, owing to Covid-19, it has moved its programme online and plans to take on 300 remote participants.

Included VC, a Europe-wide 12-month VC fellowship, also kicked off for the first time last summer — and yesterday opened applications for its second, global cohort. The 40 successful applicants will receive mentoring and coaching, and take part in masterclasses and simulated investment committees. 

No-one has yet proposed a product-focused and scalable solution to the problem.

But the impact these programmes can have is limited; the cohorts are small, and there’s no guarantee of a job at the end. 

“No-one has yet proposed a product-focused and scalable solution to the problem,” says Claerhout, who aims to onboard 500 people in Merit’s first beta cohort. 

How it will work

Claerhout took inspiration from Pioneer, the online startup accelerator founded by former Y Combinator partner David Gross, in which participants gain points for demonstrating progress each week and doing great work on their business. 

Analysing a company on the Merit platform

On Merit’s platform, the work done will be that of an analyst or junior VC at any fund; sourcing and analysing companies and markets. Participants will find and analyse one promising startup per week, and analyse investment opportunities found by two other participants too. That way, all ‘deals’ will be peer-reviewed — so the points scored by participants for doing good work will be fair, and participants can learn from and help one another, says Claerhout. 

“I don’t assume any knowledge at all,” adds Claerhout — which he realises could give an advantage to those who do already have experience evaluating markets, like those who’ve been to business school or worked in consulting. 

It’s like Codecademy for VCs, where people can learn by doing.

To get around this, he will provide resources like videos and blog posts on the platform to explain to participants how to look at markets and business models, and provide frameworks for their analysis. “It’s like Codecademy for VCs, where people can learn by doing.”

What’s more, users can go incognito. “I don’t want to know who you are; everything is anonymous — the platform is user name-based. The only thing you need to do is commit to the goal of learning about VC and contributing to the platform. If you do a good job, you will surface.”  

Merit 'gamifies' the role of a junior VC

The first ‘tournament’ will run for six weeks, and require about three hours’ work each week. At the end of it, the top 50 participants will get access to a curated list of VC job postings, and the top 20 participants will be introduced to VC firms (ideally ones with open roles).

Claerhout says he’s hoping to get as many VCs involved as possible, and has already had a handful of VCs say “set me up with meetings anytime”. He says he’s also speaking to some of the headhunter firms VCs often work with. 

Not perfect

Merit will need several factors to work out in order to succeed. It will need to attract a diverse user base, sign up well-respected VC firms and provide a great learning experience to participants. 

Spreading the word shouldn’t be too hard. Claerhout says he’s trying to speak to as many of Europe’s diversity in tech communities as possible, along with getting in touch with universities and making noise on social media. Merit will also have a referral programme, whereby participants get extra points for bringing onboard others (and extra points for signing up others who go on to perform well). 

When it comes to the learning experience, Claerhout realises it will probably need some tweaks along the way. The fact that participants aren’t paid for their work is, he admits, “a problem”. 

If I can build a community around this, I would like to ask VCs for a small fee for the intros I make, so I can reward participants for performing well.

“If you’re in a tough spot, you could spend those three hours per week studying or waiting tables,” he says. “Further down the line, if I can build a community around this, I would like to ask VCs for a small fee for the intros I make, so I can reward participants for performing well.” 

Another option is to pay participants if startups they scout are picked up by investors, he adds. 

As for getting top VC firms involved, Claerhout hopes that it will be in their interest to do so. Whether truly interested in diversity or not, recruiting can be a pain in the ass for funds, he says; headhunters charge huge fees, while running recruitment processes in-house can lead to hundreds of applications which, typically, junior VCs are left to sift through. 

Merit could be a pain-free solution. “The risk is only that they get more qualified candidates,” Claerhout says. 

Amy Lewin

Amy Lewin is Sifted’s editor and cohost of Startup Europe — The Sifted Podcast , and writes Up Round, a weekly newsletter on VC. Follow her on X and LinkedIn