Im a first year analyst at a PE firm, want to switch over to VC. Have a first round interview coming up with a largish VC firm. What sorts of questions should I expect? How many rounds of interviews are there generally? What sort of compensation should I expect if Im offered one? How many hours per week would you estimate?
Background: Im coming from a growth/expansion capital PE firm in the lower middle market, and have experience that is broad enough to make me think that my experience is pretty comparable to this other position - the maximum investment amounts in the different companies is actually comparable. Thanks in advance for the advice.
I got asked the following...
Why VC? Which portfolio companies of ours are would you most interested in following, and why? What deal experience do you have within XYZ industry (whatever they focus on)? Follow-up questions based on the deal you answered to previous question -- role, challenges of transaction, valuation multiples, outcome, etc.
Didn't make it to offer stage so don't have much more information for you... interviewed mentioned they work ~60 hrs or so a week. I would suspect that the questions I gave are probably similar to the ones that your current company asks.
which companies you like right now that you'd invest in and why? where in which sector do you see opportunities, how will that change in 3 years? how would you screen potential opportunities? Stages of VC execution process and what happens at each stage?
Prep for a VC Interview (Originally Posted: 01/15/2015)
Hi, so I have an interview on Monday at a prominent venture capital firm. Can anyone provide me with some information to prepare for it? Like what types of questions might be asked, will I need to make an investment pitch, and etc? Also, based on the pictures of "the team," everyone is dressed business causal. Should I not wear a suit and tie to the interview because of this?
Thanks in advance.
Anyone?
bump
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VC Interview - Life sciences VC (Originally Posted: 05/13/2013)
Have a ~30-minute discussion with a life sciences VC coming up. Any thoughts on what I should expect (aside from having opinions on potential investment spaces, their portfolio companies, etc.)?
Would really appreciate it - thanks everyone.
They'll prob just want to know how they can help you and then just talk about themselves the entire time
Early Stage VC Interview - Dream Job (Originally Posted: 11/14/2011)
So I'm not sure if you remember but I posted a few weeks ago about how VC is my dream and what to do to get into it etc...I'm graduating in December, currently at a HF as a part time analyst, may end up there FT if they extend an offer afterwards.
Anyways, I have an interview for an analyst position at an early-stage tech and sports VC firm this week. I've never had a VC interview before, and looked at a few previous threads but didn't find much about early stage. What should I look for besides reading about their portfolio of companies (if I can find it) in regards to preparation and interview questions. This really is MY DREAM JOB.
Appreciate any help you all can give.
"do you enjoy sourcing?"
VC Phone Interview Advice (Originally Posted: 04/18/2014)
I'm looking to transition from real estate to venture capital and luckily got an interview with a very legit VC for an open analyst position. I have a call with him next week and wondered what I should prep for? Why I'm trying to transition? Should I pitch him some ideas? I know they did some investments with real estate tech companies in the past, which I thought were interesting opportunities. Just want to get some advice from people...
Congrats and good luck, I'd like to do the same at some point. But it sounds like you already know what to do. I wouldn't pitch anything unless he or she asks. Just be well read up on techcrunch and venturebeat. And read up on their portfolio companies and investments.
VC Interview Questions (Originally Posted: 10/19/2007)
Hey Guys,
I'm new to the forum so I thought I'd test the waters with this post. In short, I have an in person interview with a smaller east coast VC shop in about a week or so, and wanted to get a feel as to whether or not they would asking any penetrating financial analysis questions (and if so, what flavors). I've been speaking with members of the VC community, reading the VC blogs, and posting on various forums, and have heard that a lot of the questions tend to focus on what's going on within the tech space (deals, key players, what's hot, questions regarding how to analyze as startup, etc.)...but feel free to provide some additional input.
Btw, I graduated from a top public university (undergrad), just finished an "IT" masters degree from a semi-no name university, have been working in the consulting/tech sectors for the past three years (since graduation), currently am interning at a boutique i-bank, and am prepping for the CFA L1 exam...and also learning how to use Excel/VBA effectively.
Thanks.
what stage do they invest in?
They mention early growth stage, but they focus their investments on startups in practically every phase of the growth cycle.
VC Interview Coming Up (Originally Posted: 07/09/2008)
I know this forum isn't as popular as some of the other ones, but it's been pretty valuable to me so far and I'm hoping I can get a few good responses. I have an interview coming up for a pre-MBA Associate position with an early/mid stage VC/Growth Equity shop with a little over $500mm AUM. I have already passed multiple rounds of fit/background questions and am now going in to meet with all of the partners. My background is in banking (non-tech group)and did extremely well in UG from a semi-target. I was asked relatively thorough questions in my "second round" interview that pertained to my phone/sourcing skills as well as some of my financial abilities (was told that the modeling in VC is not too difficult and I shouldn't really have a problem with it coming from banking). I have tried my best to read up on the industry and on Associate responsibilities and am comfortable that I will be doing a good amount of sourcing as well as looking through business plans, doing valuation and other types of financial modelling, and putting together investment memos and term sheets. Am I missing anything? I would guess that meeting the partners might be relatively fit oriented since the group isn't huge but I really don't wanna be blindsided with technicals or VC specific questions that I haven't seen before. Do I seem to have a good handle on the responsibilities and the knowledge base necessary? Can anyone give me any tips?
Thanks in advance.
anyone?
Your fit is more important to them than anything else. Also, make sure you can clearly convey how everything you've learned in your previous work has prepared you for this position, and what you will provide them.
Have meeting with partner of VC fund (Originally Posted: 07/17/2012)
Got a meeting with a VC partner next week -- I don't know much about VC at all (I mean, I know what it is, but nothing technical).
Any recommendations for literature I should read before then? Anything technical I really need to know?
Thanks all.
just try to dig in to his decision process, and how he manages the firm..
Chances are, if you haven't really thought about VC much, you will look like a noob regardless. Just my experience from coaching underclassmen. Can be really hard to fake knowledge / experience with these kinda things..
based on that, I highly recommend to just ask him what you really want to know... If you just want a job, ask him more about that.
would definitely check out our best discussions on VC in our FAQ section.
PM'd you
Think of why you wanna do it. The partner will not ask you how to calculate an option recharge in a cap table with warrant coverage, convertible debt, and other bells and whistles.
Why VC: - Love the sector - Passion for entrepreneurship - Working with smart and driven people that have similar interest - Help build companies - Follow companies through investment cycle - Operational aspect when working with portfolio co on particular project. - Etc.
Make sure you know the macro trends of the fund space. Know the recent deals (acquisition, IPO, financings).
Think through and show passion, that's the only way you'll get traction.
If anyone still checks this subforum, any advice for a VC interview? (Originally Posted: 08/10/2015)
I'm an MBA grad and I've never had a VC interview. The person I'm interviewing with is a senior leader within the VC fund who also sits on numerous boards. I haven't done much preparation for any VC interview as I don't think I had a chance.
What are some questions to expect and what are some good questions to ask? Will I get any technical or market related questions during the phone interview?
VC interviews are hugely variable. You can see some of the common questions here: http://www.askivy.net/articles/venture-capital/interview-preparation/to… and here: http://www.investopedia.com/articles/financial-careers/08/venture-capit…
Anything's on the table though. The biggest curveball I got was when an interviewer asked me which of their portfolio companies I hated. All of the interviews I did weren't very technical, but the potential is always there.
Given your background, I think the most likely thing that you'll really need to polish if your answer to "Why VC?" You need to demonstrate a very clear passion for technology and a good reason for going into VC instead of the startup world.
Happy to talk more if it's helpful.
Thanks, it is helpful. Any tips on good questions to ask at the end of the interview? This is my first VC interview and want to convey the right attributes and interests.
Try to make it as organic as possible; ask about things that you're genuinely interested in. Do they have an investment you find interesting? Ask about it. Do they something a bit differently than other VC firms? Ask about it.
I typically start that portion of the interview with a generic "I'd love to hear about how you've gotten to where you are today". It gets the conversations flowing, they kind of expect it, and it opens up other potential avenues of conversation if you're listening attentively.
Of course, if you can do it without sounding like an idiot, it's always a good idea to ask about the job itself. Not all VC positions are the same. Sourcing responsibility is probably the biggest variable.
Please don't ask about their favorite experience.
HELP! Upcoming VC interview! (Originally Posted: 12/16/2011)
Hi monkeys,
I am currently serving national service and will be matriculating at a semi-target next fall (Stern/Haas/Ross). Through family connections, I managed to land an interview with a partner at a VC firm that has offices in the major cities (including Silicon Valley).
What are the type of questions that I'll be posed, given my current academic qualifications (i.e. high school graduate)?
Thanks!
One of the first things you want to find out is whether the VC firm is sourcing heavy, due diligence heavy, or portfolio company heavy. I knew the place I was interviewing for focused a great deal of time on due diligence, so I made sure that my examples would showcase ways I would add value to the due diligence process of the firm. We also work very closely with the entrepreneurs in our portfolios, so demonstrating that I could effectively build and deepen relationship with an entrepreneur was key.
I would imagine that the greatest portion of your interview will center on the tech sector. Showcase your understanding of the industry, have strong, sound, and articulate opinions about some companies in your radar, and come off as genuinely interested and passionate about the field. Since you don't have much real world experience at this point, also make sure you have a very compelling case as to why you want to do venture capital. Having a crisp and genuine story will be the critical hook for your interview.
As far as technicals go, it really depends on the VC firm. My interview was not very technical, although I did get a question as to how I would value a company that didn't have positive cash flows...By no means it won't be as grueling as typical PE or IB interviews, but familiarity with accounting and valuation methods is a good idea. Be familiar with how to run a DCF, apply (tech-related) multiples, and valuation methodologies that venture capitalists typically employ. I doubt it will get this technical, but you never know, and it's better to err on the side of caution. A good place to start is Prof. Damodaran's website. It's free and he goes into early-stage company valuations.
Hope this is helpful. Gluck.
@esbanker: Thanks for your advice! My interview is in a couple of days' time, so I'm trying to read up as much as possible on VC industry since I've been so focused on IB in the past 1 year.
A few questions: - How do you tell whether the VC firm places emphasis on which aspect of the job based from the website? (sourcing, DD, portfolio company support) - Is my explanation correct for the question on 'valuing a company that does not have positive cash flows'?
"For early-stage tech companies with negative FCF, you can use the revenue multiplier method or the modified DCF method.
Let's start with the revenue multiplier method. Companies can generate revenue even when they have negative FCF. This method is based on market-driven multiples from comparable companies that is applied to the subject company's revenue level. It is especially for firms which have high R&D expenditures and no earnings record.
For the modified DCF method, a market-derived revenue multiple is applied to the expected revenues for the terminal year in deriving the terminal value for the exit multiple method. The discount rate used is CAPM, and you discount all future FCF back to year 0 using the discount rate.
However, since VC firms tend to invest in private companies, there is usually a discount of around 30% in value due to liquidity and transparency issues."
I'll definitely read up more on market outlook for tech industry. I'm familiar with DCF and the usual valuation methods employed by VC firms. Thanks again!
NEED VC INTERVIEW HELP (Originally Posted: 04/22/2015)
What's up guys. I have a venture capital interview in a few days for a summer internship position. I am a junior in a non-target business school studying finance. The firm is made up of about 5 people and they help companies in their early stage.
Do you guys have any tips for the interview? Also, the interviewer asked me to look at the VC's current portfolio and choose what I thought was the best investment and be prepared to talk about it for 5-10 minutes. They've invested in private firms so I can't really judge them based on their financials. Any advice on handle this task? Any advice would be appreciated!
I've spent the last year working for a seed-stage VC firm.
VC is all about exposing weakness. Most of the time, these firms are composed of people who've developed an app or service that's going to "revolutionize" or "compliment" some segment of an industry. Analysis of their management team's competencies (does anyone on their executive team have any experience in finance/strategy/mgmt experience?) and doing extensive diligence into the "pro-forma" statements they've developed internally, market share potential, etc.. is key. Much of the value lies in securing profits associated with patents they've developed or are in the process of developing.
Most of these guys have no clue how to properly model a pro-forma income statement, let alone forecast an industry segment's growth potential and market opportunity. Take nothing they give you at face value.
The funding process is very rudimentary and valuations are typically based on EBITDA and/or Revenue multiples of precedent transaction of firms in similar spheres. Access to CapIQ was essential for me.
Bottom line: determine how this firm plans to make money and whether it's realistic given their management team's background (along with that of your general/limited partners). You really need an entrepreneurial mindset and an innate business acumen to do well in VC.
You work at a seed stage VC firm and use EBITDA and precedent transactions to value your investments? Uhhh, ok...
vat
PM'd you
My first VC interview coming up - have a background in consulting (Originally Posted: 12/15/2009)
I'm coming from a mix of consulting and internal corporate strategy. I have my first VC interview coming up and was wondering if any one could provide some advice on how better I can equip myself for the interview.
Has anyone else here made the similar transition?
have a couple of investment ideas or themes ready; know the firm you're interviewing for (are they looking for a sourcer, or a jack of all trades, etc); show domain expertise
Awesome, I'm curious how it goes. Is it a early stage type fund?
Here's my two cents even though I'm only an intern at a VC fund. I would study up on the notable portfolio companies, the partners, and major trends in technology. Ditto on having investment ideas or themes ready.
In my humble opinion, a VC is looking for:
Interpersonal skills - VC is a lot about selling capital. I feel this extends beyond just a sourcing role and truly is the number one skill. Your "Why you want to work at this VC fund?" answer should be strong enough to convince an entrepreneur why he/she should take this VC fund's money.
Critical thinking / "intellectual horsepower" - Very important in building a strong investment thesis. Keep in mind of Porter's Five Forces when analyzing an industry. Generally, I feel they're looking for the type of analysis you might find in a McKinsey Quarterly article (e.g. "I see three hurdles to the widespread adoption of cellulosic ethanol: one, ...."
An acquaintance with major trends in VC - you should know what is cloud computing, virtualization, enterprise software, SaaS, etc. I like reading up on www.techreview.com for this. Also be aware that VCs do a lot of growth equity deals which don't relate to technology at all. For example, Sequoia Capital is invested in American Dairy, Inc which sells powdered milk in China.
Interest in entrepreneurship - have some examples ready where you thought about entrepreneurship or thought about how you'd run a business
Tenacity - follow up with Thank you e-mails and be persistent. It's a highly transferable skill to the job.
Here is a good blog post on in it by an associate at Bessemer Venture Partners http://www.adventurista.com/2008/04/vc-pre-mba-hiring.html
Good luck! I'm sure you'll do well given your background in consulting and corporate strategy
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