VC interview questions

Are there any proper study guides for VC? I know Peak Frameworks does PE, but anything for VC or Growth? 
 

Also, what are the differences between VC and PE interviews? Type of questions / cases. Obvi you’re not building big 3 statement LBOs with multiple tranches of debt 

 
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VC and Growth Equity interviews will have more of a qualitative bend to them than your standard PE interviews. PM me if you want materials.

Below are a few common question / case archetypes. Important: If you're interviewing for a role in VC or Growth, make sure to go beyond what is asked by the question, you need to display your ability to "think different". 

Initial Screening Cases - Open-ended case studies that are usually as an addendum to your resume as part of the initial screening process

1) What is the common theme you see across our portfolio? 

This can be a tricky question depending on how much information is available online about what companies are actually a part of the firm's portfolio. Additionally, as nearly all of the firm's companies are likely private, it'll be difficult to find detailed information even if you know the portfolio composition.

While you'll likely need to conduct a significant amount of research to try and spot similarities between portcos, another thing you should do is listen to podcasts or interviews that feature that firm's partners. They'll usually discuss their investment philosophies or common company characteristics they find attractive. These traits will usually be found in multiple companies in the portfolio, which should help you flesh out your answer.

2) Send 2-3 companies we should invest in and why

This question is basically trying to assess how much time you've actually spent researching early-stage companies, as someone who has a passion for early-stage investing will likely send over a more unique list. 

While this question appears pretty straightforward forward don't let that fool you... what you really need to do is send 2-3 companies that have been highly "diligenced" (already have a relationship with the founder, can articulate distinct competitive advantages, etc.) via a brief slide deck (think 1-2 slides per company) and then also send an excel that has 15+ other investment prospects that you believe merit further consideration. 

As mentioned in my initial prompt, the key to VC and Growth interviews is to display your ability to "think different", while still addressing the core question being asked. 

3) What industry / category do you find the most compelling to invest in?

This question is basically just trying to gauge how well you can spot and articulate high-level trends that could make an industry attractive from an investment point of view. When laying out your answer you'll likely want to identify some high-level trends that caught your attention about a particular segment and then provide a few companies in the space that illustrate why the industry is so compelling. 

Long-Form Cases - Cases that take multiple days to complete. The below descriptions are pretty sparse, but that is indicative of how these cases actually are. You'll usually be given a very open-ended task and then asked to create a write-up or presentation

1) TAM size 

Sizing and forecasting the addressable market for a given startup. Might include a twist like how much of the market will be retail versus online and how will that dynamic change over time

2) Unit Economics

Outlining hypothetical unit economics for a business

3) Analyzing User Data

You'd usually be provided with an excel filled with customer data and then asked to do a cohort analysis, LTV/CAC analysis, and payback period analysis.

Array
 

Just sent over materials, I hope they're helpful.

As an addendum to my answer above, I also wanted to add the below point:

Meeting Founders Through Beta Testing

In my previous answer, I mentioned that being able to say that you have a relationship with the founder of a promising startup can differentiate a candidate. One of the easiest ways to start building relationships with founders is to offer to be a free beta tester.

This came to my mind as I saw that YC had its spring Demo day just a few days ago (April 5/6 2023). While you won't receive an invite to the demo day, you can sort by "Batch" on YC's Startup Directory and reach out to the founders from the latest batch of startups. Send customized congratulations emails/linkedin messages to these founders and mention that you have a growing interest in technology and want to gain exposure to early-stage businesses to help you transition into VC investing or something like that. Two things to be conscious of while doing this:

1. YC founders likely know each other, so be sure that you're messages are actually customized and thoughtful. There's a chance they keep in touch after YC and you don't want to be known as the person who just spams founders

2. Clearly lay out your motives, as some founders will be leery about what your real intentions are. For example, they might think you're trying to steal their idea and create a competitor. As most of these companies are pre-revenue/pre-products, the founders will likely be extra suspicious of your intentions

Also, don't just limit yourself to startups in YC, look at other national/regional/local accelerator demo days. The benefit of doing this is you should actually start building up relevant market knowledge about a particular market category and will start to gain a feel for who the category winners/losers will be

Array
 
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