Would-be venture capitalists in Europe are about to gain expanded access to a prestigious US training programme.
As of next year, the British Department of Trade and Industry (DTI) will sponsor up to four people to follow the Kauffman Fellows Programme, a two-year course designed to nurture venture capital (VC) talent. Participants will spend two years working at a VC firm, supplemented by tuition at the London Business School and an as yet unidentified top UK university.
Places are likely to be strongly contested. According to the Kansas-based Center For Venture Education, which has run the programme since 1994, applicants typically outnumber places by a ratio of up to 15 to one.
Michelle Freyder, US-based director of communications for the Kauffman Fellows Programme, says successful applicants typically have at least five years' work experience, with some having as many as 20. Many are already working in the VC sector, although this isn't mandatory. "We take the best and brightest from science, medical and engineering and IT backgrounds," says Freyder. "Some come straight to us from PhD courses. Some 30 out of 43 people in the current class are MBAs."
The places sponsored by the DTI will be open to all nationalities, but would-be participants will spend their time working for a VC firm in the UK, instead of the US, where fellows are typically located. The UK fellows will nevertheless travel to the US to study classroom modules alongside their 25-or-so US colleagues.
3i, the London-listed venture capital group, has worked with the Kauffman Fellowship for the past six years. Jo Taylor, head of UK venture capital at 3i, says the group uses the Fellowship to educate its senior people and partners, who benefit from a new perspective on investment techniques and the opportunity to develop a network in the US.
Ali Erfan, a partner at 3i in London, is among those currently studying the programme. "The Kauffman Fellowship is about as close as you can get to studying an MBA in venture capital," he says. "It's unique in managing to attract some of the leading lights in the venture capital industry as content providers: there's very little in the way of pure academics and much more actual venture capital practitioners passing on their experience."
The DTI said it is sponsoring the programme to help improve the depth, breadth and global reach of UK venture capital firms. However, Taylor said the government's offer to cover the 50,000 course fees, usually paid by participating firms, is unlikely to encourage any but the smallest UK venture capital outfits to get involved. "The attraction for us, is building a network in the US. If fees were subsidised but tuition largely took place in London, it might put us off."
Nevertheless, a place on the programme is likely to prove valuable to anyone with an urge to make a name in VC investing: 80% of Kauffman Fellows remain in the venture capital industry after the programme ends, with 75% remaining or becoming general partners in their firms.
Guy Townsend, managing director at Walker Hamill, a search firm specialising in the private equity and venture capital industries, admitted to not having heard of the fellowship, but said it sounded interesting: "Purely theoretical experience doesn't get you a job in this industry, but a two year secondment does."