This summer, I completed a two-week internship at Target Global, a pan-European Venture Capital firm based in Tel Aviv, Israel. I was deeply interested in this field as the IB Business Management provided little details about my core interest in a business: investing. To be more specific, I wanted to learn how venture capitalists analyse businesses by combining qualitative factors (such as the founder's vision and implementation, the company's team, and of course the product itself: whether it was innovative or the right market landscape, patents, ) with quantitative factors such as revenue, profit, CAGR (Compounded Annual Growth Rate), Customer acquisition cost (CAC), customer retention rate.
Furthermore, I also learned fundamental research skills when trying to understand a new market (in my case, this was the sustainable cleaning product market) or how to use Microsoft Excel to create Pivot Tables and do a Cohort Analysis. If I was to take one thing from this experience, it would be to analyse business with a combination of qualitative, and quantitative factors and my personal intuition or understanding of the product website
My insights from Target Global
In summer 2022, I embarked on a two-week internship at Target Global, a venture capital (VC) in Tel Aviv, Israel. I chose Target Global because I wanted to learn more about pan-European Venture Capital and the European entrepreneurial scene and the businesses it generates. As a fund that has had success funding the likes of DeliveryHero, Wefox, Flink, Rapyd, and Copper, I wanted to understand how decades of VC experience can be used to realize multibillion-dollar companies. Tel Aviv is also a hot bed for innovation within a country that has the highest R&D intensity in the world spending 4.7% GDP compared to 2.7% in the US. Moreover, the majority of R+D funding in Israel is from the private sector (73.4 %.) This made a VC internship in Tel Aviv an amazing opportunity to learn about VC and innovation.
I was keen to take my IB knowledge learned in the classroom and apply it to the real world. Whilst in IB we learned about different funding types, operational practices, and R+D, at Target Global I learned how important capital injections can be to turbocharge growth at the right point in a start-up’s development. Moreover, though we learned about Porter Strategic matrix for allowing companies to focus on either cost or premium differentiation, the team at Target Global showed me how strategic advice, connections, or services can be used to meet scaling problems. In school, we learned about Handy’s shamrock organization and how 21-century companies often organize around a core team which interacts with peripheral workers and contract workers. Nonetheless, how one creates the core team, and how important organizational structure is, whether it be by function, geography, or product, was only made clear in a hands-on way working in VC. Lastly, I learned that as companies move through their product or service life cycle, the importance of building a best-in-class board, and company culture to drive innovation and retain workers, is key to creating global players, redefining new sectors, and creating new market leaders.
This experience showed me that I need to keep my mind as open as possible. Whilst at Target global I worked on researching Ankorstore, Lyrics Training, Eyeware, BeReal all technology start-ups as well as investigating the sustainable household cleaning market and companies such as NCX, Tomorrow, AI dash, Jupiter, and Arturo. To analyse these companies and whether they were potential targets for funding, I learned fundamental Microsoft Excel skills which I used to create cohort analyses and pivot tables. Cohort analysis of companies like Ankorstore is important because it enables both companies and funders to understand if people love their service and potentially how big the service can be. I learned how to choose the correct segmentation for these companies to create meaningful data.
Whilst outside VC the absolute number of customers returning would seem the most important, the senior analyst I worked with showed me how the relative share of customers is more important, especially with robust and large data sets. In the case of Ankorstore, assuming they hypothetically have 10,000 new customers joining the service every month, with an 80% customer retention rate, growth could stall quite early with user numbers topping out at 50,000 customers since the rate of customers leaving equals to that of customers onboarding. Therefore, cohort analysis is key for VC to ensure that they are funding true growth driven by customer satisfaction as opposed to growth fuelled solely by marketing.
Another key skill I learned was the use of pivot tables. Regular flat tables used in Excel often contain many data items which can be difficult to get summarized information from in order to pitch a potential company. Which is why pivot tables can be used to manipulate data. Through the use of pivot table fields including filters, columns, rows, and values, I was able to perform valuable quick cohort analyses of companies like Ankorstore; in addition, for large data sets (50,000-line items or more) I learned how to create pivot tables that I could use to summarize the ROI based on investment and returns.
Outside of these skills, I was able to learn more about the day-to-day experience working in VC through this exciting experience as well as clarifying some the of assumptions I had before going into it. Whilst there were a lot of team working opportunities, I learned that in VC, most juniors/associates work their own pipeline of deals, analysed them independently, and pushed for them within the company. This was perfect for me and my insatiable curiosity and strong independent spirit. During the two weeks, I worked with a diverse range of companies., I looked at and learned from start-ups in the eCommerce space including Ankorstore as well as Eyeware an AI eye tracking service that is poised for major success. I can see how working in this field over time, I would be able to develop expertise on specific business models, and operations to fund successful businesses. I was also able to see how research and development, specifically creating and supporting the best R+D teams, could generate paradigm innovation, a concept we learn in IB Business. Companies like Eyeware, and many of the companies I researched, want to permanently change how consumers interact with technology. In the case of Eyeware, they aim to democratize eye tracking software and generate entire industries in the process. The ability to fund early-stage companies like this is why I am excited about VC.
I also learned from analysts, Principals, and Senior partners, the challenges of investing in growth and having 5-10-year feedback loops. The patience, emotional stamina, and hustle required are immense, as you follow companies ups and downs over years. I also learned about the intense competition for the best deals and the challenges of finding and funding unicorns every year in order to be successful.
As a budding entrepreneur, it also allowed me unprecedented insight into what the other side looking for. Being able to understand what metrics, tools, and heuristics, venture capital firms used will allow me to pitch any of my future companies to them effectively. Within this tiny industry, at the frontier of innovation and disruption in the world, I built relationships in Tel Aviv that I will no doubt continue to use in life. I was able to learn about European companies, VC, and where my interests in this field lie namely in seed/early stage venture capital as well as entrepreneurship.