Cliché time: you have to spend money to make money. And nowhere is this truer than in the world of venture capitalists (VCs), who spend other people’s money on new business ideas in the hope that the fledgeling company will become a success and make everyone involved richer. (VCs, who work with capital provided by investors in a fund, shouldn’t be confused with business angels, who are wealthy people who invest their own money directly into new enterprises).

The trick to success is choosing the right new schemes in which to invest – which means reviewing a lot of submissions, says Andy Cucksey, the head of marketing at YFM group. “We get 2,500 to 3,000 business plans... looking for funding,” he says. Once the fund’s VCs have found a plan they think has merit – on average they take on between 3 per cent and 5 per cent of those they look at – they meet with the firm’s managers and advisers and work through a deal.

VCs need business acumen to assess companies’ cash flow, prospects in the marketplace and potential for growth and often come from a business or accounting background. It is not for new graduates, says Christoph Ruedig, 31, an associate in 3i, a healthcare practice. He picked up a medical degree, several years’ experience at a management consultancy and an MBA from Insead before moving into venture capital. “It’s a very diverse job in terms of the skills required,” he says. “You need people, commercial and technical skills that relate to your fund’s specialism.”

But it is an exciting job. “You work with very talented people,” Ruedig says. “It’s rewarding. When you first invest, the company is a bunch of people with an idea and maybe a prototype. You help them to develop it and grow it until it’s a huge company. Plus you make money.”

Just how much money will vary. Entry-level jobs pay about £40,000, but the more money you make for your fund, the bigger your bonus will be. Very good VCs with a solid track record can set up and run their own funds, wooing investors with their stellar track records. www.yfmgroup.co.uk

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