Interviewer lacking confidence in his own group - should this be an area of concern?

Had an interview today with a few guys from a VC group. Interview was going great until the Q&A session. Naturally, I asked about the return profile of the latest fund since that’s a standard question and important for me to know.

The principal suddenly turned bright pink and started to studder heavily when answering and wasn’t able to produce a coherent response then diverted the subject to something random about one of his portcos. 
 

I also asked about some recent investments in their portfolios and got a blank stare for a good 10 seconds before I got some canned response that I can barely remember. Should this be an indication that the principal did not do a good job with his investments and underperformed? 
 

I was also thinking that perhaps he wasn’t actually part of the investments team / doesn’t know much about investing, and instead maybe worked in some other capacity but his linkedin and business card title says investments on it so unclear what that means??

 

Well, it's a bit of a tricky situation you've got there. It's not uncommon for people to get a bit flustered when put on the spot, but it's a bit concerning if a principal at a VC group can't answer basic questions about their fund's return profile or recent investments.

It could be a sign that the principal is not confident in the performance of his investments, or it could just be that he's not great at thinking on his feet. Either way, it's definitely something to consider when deciding whether or not you want to work with this group.

As for the possibility that he's not actually part of the investments team, it's hard to say without more information. It's possible that he works in a different capacity and just has "investments" in his title, but it's also possible that he's just not very good at his job.

In any case, I would recommend doing some more digging to find out more about this group and their track record. You could also try reaching out to other people who work there to get a better sense of what's going on.

Remember, it's important to trust your gut in situations like this. If something doesn't feel right, it's usually for a good reason. Good luck!

Sources: The Asymmetric Risk Profile: Preparing for the Hedge Fund Interview, Q&A: Principal at Early-Stage VC Fund, Troubled fundraising processes, Q&A: Principal at megafund

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

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