AMA: 1st year VC analyst (~750M AUM)

Hi all,

Have been using WSO as a source of info for quite some time (soph year of college... now 3 years out of college) and decided to see if I could contribute in any way. I will try to be as responsive as possible to any questions you may have. See my story below:

Joined a consulting firm after undergrad

Graduated from a non-ivy school studying finance and statistics. While in school, I discovered early on that I'd want to do management consulting (for a lot of the typical reasons people go into consulting for). After graduating college I joined a consulting firm and worked there for roughly 2 years. Frankly I did not enjoy the role as much as I thought I would - felt that a lot of my work was quite frankly bs - always felt that 80% of my tasks/projects were 'check in the boxes' and things that needed to be done to get a deck together, and 20% of my work actually made an impact on my clients. Maybe this was because I didn't work at MBB? My favorite part of the role often was the first couple weeks of a case, where everything was completely new and, in cases where partners didn't know the 'answer', there was actually something to solve.

Ready to leave consulting

Towards the end of my stint, I decided consulting wasn't for me and wanted to break into PE/VC (buyside roles that focused on operations or market more so than financial engineering... so ultimately felt earlier stage was a better fit for me). In terms of industry focus, I was pretty agnostic - I was a generalist at my consulting firm and had a wide variety of experience. I personally was more interested in life sci / healthcare as I enjoyed learning about science behind products / technology. I felt that if I found the right firm, I could flip that 80/20 ratio and do high impact work at a high frequency. I reached out to recruiters. I went through the traditional recruiter network path and relied much more on that avenue than I think most folks in VC do (i.e. didn't spend nearly as much time networking with professionals as maybe I should have).

Opportunity at a healthcare VC

The recruiting process was brutal for me, I kept getting to final rounds and bounced out for a variety of reasons - much of the feedback i received was "they just liked the other guy's IB background better than a consulting background". I'm sure my technicals were not as sound as the IB competition I faced at later stage buyside shops, and a combination of bad luck didn't help. I was recruiting for about 6 months and there were many times I felt like giving up. Finally an opportunity came across me from a healthcare vc that seemed like a strong fit given my natural interest in the industry. Got the job and have been here for a little under a year.

Activities at my current role

So far it's been fantastic. The role itself is a non-sourcing role with a heavy emphasis on diligence (reading newco pitches we get from our pipeline and presenting anything interesting to the senior team, and conducting deep diligence for opportunities we take a liking to). Conducting diligence includes a wide range of activities: financial diligence (building cap tables and returns/waterfall analysis), market / competitive diligence (conducting primary research), direct interactions with the c-suite of the company, building market sizing models and in later stage opportunities building out projections, working with outside counsel on legal strategy for voting rights, protective provisions, etc.

Anyways, there's a lot more info I've left out of here, but hopefully this gives you some background and am happy to answer any questions for folks that have them.

Comments (40)

Aug 19, 2019

How exactly did you go about reaching to headhunters for VC/PE roles? From my understanding, it's still very tough to make the transition from Consulting to buyside unless you are at MBB or a tier 2 firm.

Which headhunter/recruiters did you use or find most effective? And what was the interview process like in terms of technical questions, case studies, or modeling tests, especially coming from a consulting background?

Aug 19, 2019

With regards to headhunters, I was at a second tier firm so I had some initial headhunters reach out to me within weeks / months of starting the role. In the beginning of my role, I frankly didn't have a good grasp of the nuances on the buyside but took 2 or 3 headhunter interviews early on anyways from that initial outreach. I sent them my resume emphasizing any excel heavy tasks (financial modeling, market sizing) and diligence focused tasks (primary research) that were in any way related to M&A / transaction diligence. In the initial interviews, the headhunters were pretty straight up with me in terms of telling me that traditional buyout shops, for the most part, would likely not be interested in interviewing me as they typically look for ibankers. Looking back, I honestly used these conversations as data-points and learning opportunities for myself which is contrary to a lot of what's written on this forum. I didn't have nearly as much knowledge re: buyside and investing, but was pretty curious to learn more and used these conversations to do so. Some may argue that this is a good way to shoot yourself in the foot and lose credibility with the headhunters - honestly not sure. I remember thinking, even during these initial conversations, that I was less prepared than I probably should have been - but I emphasized to all these interviewees the importance of having true actionable stake in my work and that I wasn't getting it from consulting. I told them that the parts that I did enjoy about consulting (learning about different business models, supply chain, high level competitive strategy) could be well applied in an investing role.

After these initial meetings, which I think went pretty well, they gave me feedback regarding the types of firms that would like someone like me (mostly growth equity and some ops focused shops). I told them I was interested in taking a closer look, but ultimately didn't get any interviews (likely because I simply wasn't targeted or aggressive enough in pursuing given I was so early in my role in consulting)

    • 3
Aug 19, 2019

About a 1.5 yrs later, (after learning more about PE/VC through conversations with friends and general research) I thought that consulting ultimately wasn't for me, and started actively reaching out to the same headhunters as well as new headhunters. There are plenty of lists of headhunters online (particularly on the WSO PE forums), but for me the most effective for buyside roles were: Charles Aris, GloCap, HSP, Oxbridge, and Pinnacle Group. That being said, I literally reached out to any and every headhunter actively and scheduled calls introductions to as many as I could. There are a vast number of small headhunting shops that may be assisting with one-off PE gigs, and trying to get as much exposure to the recruiting industry is very important particularly coming from consulting. As you stated, it's difficult to make the transition from consulting to the buyside, and I treated it as a complete numbers game. I honed my resume and initial call pitches to the headhunters (by this time I knew exactly what I was interested in and why) and was much more targeted in my search.

With regards to interview process, they varied greatly depending on the shop. I interviewed for several middle market PE funds, a family office, and several early stage roles. For PE interviews, I would always have a first round informational / behavioral interview that was usually pretty chill (why PE, why this firm, what makes your experience useful to us... etc.). Sometimes the first rounds would include finance / accounting related questions to make sure I had a basic understanding of the levers of an LBO, FCF, financial statements generally, etc. I prepared myself well for these. The second round was always a case study. In some cases, it would be a take home (over the weekend, or over the course of a week, or over 4 hours). They always would incorporate an LBO model with an investment memo / case component and the complexity would vary. For me personally, it always seemed that the LBO model was not the way to differentiate myself, but rather through navigating the other complexities of the case (i.e. business model, competitive landscape, market growth / segmentation, customer concentration... etc.). Many of the shops would tell me in advance that they know consultants would have less experience modeling and that they take that into account. Final rounds were with everyone at the firm individually and would be a mix of technical finance questions and grilling my interest / fit.

For earlier stage roles, and my current role, the interviews were completely different. First round was the same, but they would ask much more market oriented questions. For example, in the interview I had for this job, they asked me about why I wanted to work in healthcare specifically, but to a greater extent and depth than the PE interviews would ask. I made sure also to be able to discuss portfolio companies at length and did a lot of diligence on the most recent investments / activity given the case work was much less. In two cases I was given an article and a writing assignment to test communication / synthesis (pretty easy). Final rounds would sometimes have cases which were more conversational than formal (how would you think about the market for sleep apnea... etc.) which were usually home runs for me given my case background from consulting.

    • 3
Aug 19, 2019

How has your consulting experience helped you in your current role? Would you recommend someone to go to VC straight out of college?

Aug 19, 2019

Consulting has helped me immensely in my role. I think the market analysis / competitive analysis etc is something that anyone from most analytical fields (whether its banking of equity research etc.) can do pretty well and is usually pretty easy to grasp conceptually. I think where it helped me the most (which was surprising for me) was my ability to present and articulate myself with ease in investment team meetings. I've gotten a lot of strong feedback on this point. While the analysis and diligence piece of the job is of course critical, I think the soft skills in consulting have really helped me gain momentum witto the senior team.

With regards to your second question, I'm not sure. I think VC is a really interesting role, but the training you get at a consulting firm (or I'm sure banking as well for that matter) is actually pretty valuabl. I'll admit that while I was in consulting, I didn't appreciate the professionalism aspect of client services as much as I do now looking back. I also now view my role in consulting as training or bootcamp for whatever you want to do after (buyside or not). Additionally, I think generally speaking most VCs aren't branded well outside of the investing world, and having a strong brand name on your resume is definitely an asset in my eyes. So I guess it's really a matter of personal preference.

If you're in undergrad and considering a VC option, I would just make sure to do as much diligence as possible on the returns of the fund, the reputation of the fund, and the actual role that you'll be given. Don't get screwed over doing something that's either uninteresting or doesn't push your skillset in a meaningful way.

    • 4
Learn More

9 LBO Modeling Tests, 10+ hours of PE Cases and 2,447+ interview insights across 203 private equity funds. The WSO Private Equity Interview Prep Course has everything you'll ever need to break into the competitive PE industry. Learn more.

Aug 23, 2019

Your last sentence is spot on...

Aug 19, 2019

The recruiting process was brutal for me, I kept getting to final rounds and bounced out for a variety of reasons - much of the feedback i received was "they just liked the other guy's IB background better than a consulting background". I'm sure my technicals were not as sound as the IB competition I faced at later stage buyside shops, and a combination of bad luck didn't help. I was recruiting for about 6 months and there were many times I felt like giving up.

Big relatable energy. I'm glad your hard work was met with success. Congratulations on the role.

Aug 19, 2019

Thank you. Always believed that hard work pays off somehow someway.

Aug 19, 2019

Hate to be that guy but comp range and location?

    • 3
Aug 19, 2019

Comp range ~130-150 all in not including carry and location not one of the top COL places - would rather not disclose more detail

Aug 19, 2019

Thanks and of course, no worries. Just don't hear as much from entry level VC people as we do from MBB / IBD / etc.

I take it you get carry in maybe 3 more promotions once you start bringing in / generating ideas?

Aug 19, 2019

What tier of fund are you at?
1. Accel/Benchmark/Sequoia
2. Bessemer/NEA/Spark Capital
3. First Round/USV/F. Mark
4. Great Oaks/Collaborative/RRE

I only ask because, from my experience, the interview process and the fund's ideal candidate differ quite dramatically. Regardless of where your firm falls in relation to the ones I listed, it really is a great accomplishment to just receive an offer. My questions:
1. How is your time allocated?
2. What is internal mobility like? Are promotions considered, or is it two and out?
3. Do you work directly with one partner, or are you supporting everyone?
4. Were you sourcing deals for the fund beforehand? I might have missed this, but did you get in through a head hunter?

Most Helpful
Aug 19, 2019

1) Tough to answer that because I'm not sure how you're defining these tiers. If it's by returns, most of the funds we have are top quartile thus far (some top decile). So I'd say its a high tier. But if it's by brand name, the firm is far from a household name, so it's probably a lower tier. Also keep in mind venture has become extremely specialized with funds going into very specific niches. For example, I was talking the other day to a partner at a first-time fund that specifically invests in seed stage behavioral health companies given his and his partners expertise in behavioral health. We're not as niche as that but I'll say we're well respected in healthcare. In terms of the broader population and general non-investor recognition, we're far from the Sequoias of the world. Define that as you will

2) My time is split between active diligence, newco management, portfolio company activities, and other unrelated office tasks. Active diligence is probably 65% of my time, 10% newco management (reading incoming pitch decks and assessing whether or not to pass), 20% portfolio company activities (board meetings, other analyses that may pop up depending on the needs of the company), and 5% misc office things (white paper-esque projects, random ops things... etc.). Happy to go into more detail on each of these if you'd like - let me know

2) Internal mobility here is strong. Promotions are considered and a couple senior members rose up from entry level positions. It's interesting because even though that's the case, during the interview process I was told that the team is looking at this as a "3-4 year commitment role". So to be frank, I'm not entirely sure, but I'm confident I can get at least 1 promotion, maybe 2.

3) Good question. I've worked directly with every partner and support everyone. It's interesting because each partner is extremely different with work style and investment focus. Managing upwards is definitely a skill that's necessary for the job

4) Nope, have not sourced any deals and have no sourcing experience - could be a positive or a negative depending on how you view sourcing. I personally enjoy diligence work over sourcing, but I know a lot of people who absolutely love the networking aspect of the job. And yes used a headhunter - I've listed a few in one of my responses above that worked well for me

    • 7
Aug 20, 2019

Great responses. Thanks!

Aug 29, 2019

Curious to learn more about the active diligence. My understanding is that most VC deals are structured like this : meetings -> term sheet -> due diligence -> deal closing.

What is included in your active diligence? What do you do to assess the opportunity before the term sheet and after? How willing are founders to share information/documents with you?

Aug 19, 2019

I'm curious how you found the process to differ based on the tier of the fund. Can you explain that a bit more?

Aug 20, 2019

Not completely sure what you mean by tier but I'll try my best to get to what I think you're looking for. The interview process of each fund varied significantly but clearly was defined by the culture of the firm and the needs the firm had. For example - one of the firms I interviewed for was a buyout shop focused on technology / analytics platforms. Their case study was a weekend long take home where I had to assess a company with a SaaS business model with several large datasets they provided me with (customer data, financials, etc.). Therefore the case probably reflected the type of work they would do in some way. Another example was a family office that literally gave me a public stock and asked me whether or not they should buy the company, and I had a week to come up with a 5 slide presentation. I later found out in the interview process that the culture there was very hands off and independent where I would literally be doing work like this had I taken the job. Anecdotally, I've heard VC firm cases and questions can range from fairly simple in person case studies, to full blown investment cases and questions on detailed decision making (i.e. should this company spend on marketing or should the conserve to reduce cash burn... etc.), although the full blown cases are much more rare from what I've heard and I've never had to do that personally in a VC intervie. VCs will also, from my experience at least, never ask you to build a cap table or do any kind of cap table / waterfall analysis modeling test, given its a topic / skill with nuance that even many people in the industry get wrong, let alone someone coming from the traditional business routes (i.e. banking / consulting). In my interview, I was asked if I had ever done cap table modeling / waterfall analysis. I told them I never did, but had extensive experience in excel generally, and they were cool with that. It's simply not an expected skill.

If your question refers strictly to brand name vs non brand name firms, I'm afraid I can't really answer it too well as most of my interviews were MM PE or non-branded early opportunities.

    • 3
Aug 19, 2019

Do you have any advice for someone trying to break in VC from a smaller, more niche consulting firm?

How might the recruiting process differ/ be harder?

Aug 20, 2019

Coming from a smaller niche firm will be difficult as VCs have the ability to be selective and tend to trust brand names significantly more than non. To give you an idea, my firm was recruiting for this position for 8+ months. They have the luxury to take their time and choose someone they really think would be a strong fit, which gives them a lot of leverage in the process. All that being said, I think you can do it if you take the right approach - 1) identify your strengths based on your work experience (sector, functional, etc.), and 2) pull every lever you can to get your foot in the door.

1) Play to your strengths. Mine was having a little more transactional diligence experience, and sector specific experience. How is your consulting firm considered niche? Are you sector specific - if so you know what to target. Are you focused on a specific function (i.e. ops v tech v strategy etc). Figure out what the best way to brand yourself with your experience and skillset is, and find the set of VCs that could use that skillset. Once you've identified your targets, do some research on the specific industries they're in and specific companies / investment thesis you have developed. This will enable you to talk intelligently about the space and convince VCs that you have interest in the industry, are eager to add value (and can add value), and are independently opinionated.

2)In terms of how to go about finding the right funds to target, this will involve a lot of research on your part. Use whatever online resources you can. Johngannongblog.com for starters has a ton of VC opportunities and also a lot of great online information on the industry. If you're in SF / NYC or any large city, leverage the shit out of your network and don't be afraid to be aggressive (to a reasonable degree) when trying to get meetings with folks to get smart on the industry / space. When you do get a chance to make an impression, don't waste it.

My last piece of advice, and probably most important, is to not be discouraged. The fact is that VC in particular is a very challenging place to break into. You could have 10 fantastic conversations with folks from a specific firm, and if they've only deployed 50% of their capital in their fund, they probably aren't going to hire anyone on the investment until the end of their fund, which could be another couple years. This doesn't mean you were a bad candidate or they were uninterested, but that it simply wouldn't make sense for them to hire you. Timing is important in VC and that's just how the industry works. Expect a lot of rejection, but don't treat rejection in a bad way. As corny as it sounds, a lot of my rejections gave me a ton of knowledge on the industry both in PE and VC. And each experience helped prepare me for the next until I got something to stick. Best of luck in the process.

    • 4
Aug 20, 2019

wasn't expecting such a detailed response. Appreciate the advice! i can see why you landed your current role. Thank you!

    • 1
Aug 20, 2019

This is definitely one of the better AMA's on this site. Thanks a ton for the in depth responses OP.

Not necessarily a question on your career per se, but as someone working ata lower tier consulting firm (Accenture/Big 4, M&A Strategy) would you advise to try and go straight for PE through networking/HHs or try and get IB experience first? I know it's super tough to make the jump from consulting unless you're at MBB or a tier below that, so wondering what my best option was. Thanks again for the responses.

Aug 20, 2019

No doubt, glad it's helpful.

Yeah that's a tough spot. Accenture/Big4 is tough unless you're working on a lot of M&A diligence / strategy work, which is usually limited at those firms (I think). The way I see it you have a few options, and it really boils down to personal preference:

1) As you stated, transition into a strong bank and leverage the headhunters once you've got some deal experience. This is probably the most surefire way to get to a PE role. Your profile says you're an intern now (assuming you're in college), so I'd say while you can see if you can land an offer at a bank if you're truly set on PE.

2) If you're already working full time, it's definitely possible to make that transition directly, it'll just be very time consuming and difficult. You'll have to spend a lot of time self educating yourself on modeling to make sure you're as strong as the competition you'll face, and aggressively network with headhunters and convince them to put you up for roles based on your preparation and knowledge of the industry. Despite all this, some PE shops will have you interview and at the very end just say they liked the banker guy better given more applicable skillset, smoother modeling, etc. - that's just how it is.

3) Your last option would be to try to get a consulting gig at MBB or a second tier firm and I've seen a couple people do this and then transition into PE. Two of my buddies for example worked at a Big4 advisory / economic consulting for two years, transitioned to a tier 2 consulting shop, and then transitioned to PE.

So which of those options would I choose? Probably the third route as it makes the most logical sense to me in terms of career progression - I'm guessing that if you're in consulting now it's probably because you thought consulting was more interesting than banking, and I don't see why that would change, so it makes most sense to me. Also using your experience to transition to a top consulting firm is definitely a feasible option and I've seen it many times. If that didn't work out I would try to network my way through and not have to commit to doing banking for a couple years. My last option would be to go the banking route as I think getting into a top tier bank would be tougher than getting a top tier consulting firm with your background.

Of course all of this is just personal preference. You may like the safety of knowing you'll be much more competitive for a PE role coming out of a bank vs coming out of a second tier consulting firm, or even MBB for that matter, and that may be the best option for you.

    • 4
Aug 20, 2019

I have no questions at this time. I just wanted to commend you for the depth and quality of your responses. One of the better AMAs I have seen here in quite some time.

    • 3
Aug 20, 2019

Loving this AMA so far :) keep up the good work!

So correct me if I am mistaken, but you initially were interviewing for PE roles, but slowly became more interested in growth equity until you eventually landed your VC role.

For those of us who prepped for PE, and decided to shift our recruiting efforts to VC, how do you suggest we prep? Anything technical we should prepare for (Cap Tables, Pre & Post money calculations, etc.)?

    • 1
Aug 20, 2019

Thanks! The threads only as good as the questions asked so keep asking away.

Yup that's about right. The good thing about prepping for PE is that you probably have a far more technical knowledge than is required for VC interview prep (albeit not very applicable either... except for growth equity, there are some shops that have a mix of buyouts and earlier minority investments).

I'd be very surprised if a VC asked you to build a pro forma cap table or do a waterfall analysis or anything like that. It's just not a skill that you're expected to have coming into VC. When I interviewed I told them I had no experience with cap tables but that I had a lot of experience working with models generally, which was fine for them. What they may ask you to do is walk through how you would do an investment analysis on a sample company - a little similar to a consulting case. Generally you'll want to focus on the market trends, value proposition of the tech, business model, competition, regulatory (and in healthcare, reimbursement) hurdles, historical financials and projections (depending on stage), management team, and exit landscape.

In terms of other prep, I'd suggest reviewing the company's portfolio for starters. See what industries they have focused on (for example, even in a broad category like healthcare, perhaps they've invested in digital therapeutics, so do some research on the space and get familiar with it). Obviously you don't have to research every company in detail, but having a general idea to the point where you can ask knowledgeable questions regarding why an investment was made will be valuable. Honestly in my opinion the most valuable part of my VC interview was the part where the the interview flips and I become the interviewer asking the team questions about investments, fund performance, culture, etc

Have some strong opinions on the market the VC invests in and be knowledgeable about recent acquisitions and rounds of financing for prominent start ups in the space. Don't be afraid to bring up your thoughts conversationally (as most good interviews become naturally conversational). They may ask you for what you think about specific trends in a market.

I'd also do research on the people that will be interviewing you - see what companies they're specifically on the board of and talk about it. Ask them about their background and how they got to VC / what their motivations were. Probably good advice for any job interview generally.

    • 4
Aug 20, 2019

This is great man, kudos for the thoughtful responses to questions.

Background: in what stage do you typically invest? What is the typical company profile?

Framework: what is your process for building conviction behind investments? How do you adapt your process over time?

Risk/Return Surfaces: what is your approach to risk management on a single name vs. portfolio mindset?

Curious as to how you model markets as well- given what I assume is scarce information- and how that feeds into the questions/answers above...

"well thank god your feelings aren't a fucking priority here"

Aug 20, 2019

Background: We typically invest in companies that are Series A - early growth. Our typical first check sizes are between 5-10M with a goal of getting 20-40 into the company over time. Typical company will be beyond proof of concept, with early commercial data. We don't typically do seed investments

Framework: Good question but tough to answer succinctly. Let's walk through the process from beginning to investment. Initially I'll get a deck, and review the deck. Let's assume it's a med device for simplicity. They'll usually have some market info, current standard of care, how the device works, clinical data, regulatory info, business model, financials, how much capital they're looking to raise, backgrounds of the team, and competition. Once I review the deck, I'll make a decision as to whether or not to pass on it. Assuming something catches my eye, I'll bring it up in our weekly meeting to the broader team to see if any partners have interest. If they do we start diligence. Building conviction around an investment decision is based on validating all of those points above. In most cases, there are one or two aspects that are critical to the investment decision. I'd focus on those for the first week or two, and if I can't rectify the issues at hand I'd pass quickly. For example if we think early on that HC provider margins for a specific indication are a major issue, we'd focus a lot of our initial expert calls on understanding what the margins are and where there could be flexibility, because if we can't get by that issue, we can avoid doing a bunch of unnecessary work just to not pull the trigger (very unlike consulting where you've gotta validate every point significantly). This process is continued as we continue asking questions and answer them until we feel like we've hit everything major and think we can work with the company to get to exit. Don't really think the process is adapted over time so much as views on specific markets over time as they develop.

Risk/Return Surfaces: I'm honestly not sure I can answer (maybe I'm misinterpreting the question... feel free to clarify?) - this is probably something the senior team focuses on and isn't something I've had to come across. Generally speaking we don't usually invest in companies that would be directly competing with one another (although there are firms that do)

Market models: Spot on with scarce information. I spend a lot of time reading medical literature (we have access to a few databases) - often times there are prevalence studies that are released on specific indications, so most of my modeling is done top down. What's more relevant is cutting the market by treatment modality, care center, etc. I'll use a combination of secondary sources and interview feedback to make cuts. When I first joined, I would get pretty complex with my builds, looking at varying rates of prevalence, incidence, and mortality using as many random literature based sources I could find to be as precise as possible in forecasting out a market size through time. This was the level of detail I was used to from my last job and figured it would make sense to get to that level of accuracy and depth here as well. However I quickly learned that ballpark figures and estimates (i.e. using average growth rates from three different sources and verifying with interviews or something like that) are more than enough to understand a market size and help inform a venture investment decision.

    • 3
Aug 20, 2019

@PepperJackCheddar

Thanks for doing this - really insight info here / appreciate you taking the time to provide thought out responses. Two quick questions for you

  1. What are your hours like?
  2. What are the backgrounds of other people on the investment team? (i.e. IB -> VC? top-tier MBAs? ex-HC executives?)
Aug 20, 2019

Yup no problem!

1) Hours are fantastic, usually work 8:30/9-6/6:30. The firm I work at is very family oriented and so they're keen on work life balance. I sometimes drop by the office on Sunday night to prep for the week, but that's not something that's required - we usually have team wide meetings on Mondays and I like being prepared.

2) A pretty wide array. All the senior members (principal +) have top tier MBAs. The associate came from banking. On the senior team we've got a mix of engineers, doctors, and finance. It's actually split evenly (but that's because we're a lean shop). I feel like there are a couple types of VCs - the ones that operate like traditional buyside shops with guys from finance and banking, and then the ones that are entrepreneur focused and have a bunch of ex-founders and CEOs. We are the former.

    • 1
Aug 20, 2019

I have a interview for a VC firm for an analyst position coming up. I dont have VC background so i am worried about the interview. Any advice in terms of what they're looking for, especially technicals?

Thanks in advance.

Aug 20, 2019

See some of the responses above for detail on interview process. Generally speaking though I wouldn't expect too much valuation technicals (cap table / waterfall analysis). If anything they'll validate your analytical ability by asking you about your past experiencesIt's important to keep in mind what you think they are looking for given how individual fund is. For example, if they're a seed stage investor, they're likely going to be a little less interested in technical diligence skills than a late stage venture group or a stage agnostic group. For later stage venture or stage agnostic funds (Series B+, with check sizes of ~10+M) they'll definitely focus more on diligence skills. They'll do this by asking you simple 'case' style questions (build a market size, what are key investment concerns for [insert company description here], etc.). Preparation on these kinds of questions is difficult and outside of having knowledge on the market in general, there's really not too much prep you can do. Maybe practice some market sizing and some consulting style cases (or PE cases minus the technical finance aspect). In all venture they'll want to test your understanding of their target market and whether you can hold your own opinions and convictions on the space. You should familiarize yourself with some of their investments and be ready to go in depth on a market of interest. VCs usually have a specific investment mantra, so understanding that and emulating it in your discussion and opinions on the market would be valuable. Earlier in one of my responses I gave the example of a behavioral health focused seed stage venture investor. If I were interviewing for that fund, I would do some research on why that space is attractive and major drivers (aging population, lack of treatment for major conditions like alzheimers / dementia, etc.). I'd want to be able to relay that there's a long-term business opportunity given a lack of innovation in the space in decades. Then I'd look into some start ups looking to tackle the issues and try to find out where folks have succeeded, and why. I know that's a little vague, but my point is to do your research in as much detail as possible and focus on learning and being able to converse fluently regarding areas of interest for the VC. This will demonstrate your ability to learn and recognize areas where the right companies can create value.

Something I haven't mentioned in the previous responses actually is to not forget about all the "basic" questions you'll get. Don't lose sight of the "Why venture, why our firm" questions, because they are still critical in these interviews.

    • 3
Aug 20, 2019

Great AMA. We need more VC posts here.

What's your upward mobility like in the firm? Is this a 3 year analyst program? Do you have to do an MBA to progress further?

Aug 20, 2019

Have addressed this above but short answer to your question - upwards mobility is strong with a couple folks at the senior level starting entry level and working up. When I interviewed it was noted to me that this is a 3-4 year position, so I'm confident I can get 1, maybe 2 promotions. I think if I continued to do well as I progressed I could go beyond that, but honestly not entirely sure. MBAs are highly encouraged and would likely be required for higher levels at this firm. I still don't get why to be completely honest - possibly for branding reasons. When raising funds from LPs, maybe it holds weight in their eyes? Maybe additional credibility and network? Maybe I'll get a better idea as I progress.

    • 2
Aug 21, 2019
Comment