Questions to ask during interview for new fund

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slothsloth

Gorilla

Bump?

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saconsult3

King Kong

Most Helpful

There's a ton you can ask, and these are just high-level categories laid out below. Some sound super obvious (you may be coming out of undergrad, in which case they may not be obvious), so apologies if it sounds like I'm oversimplifying things, but since they're not covered in your post I'm throwing them out there.

Team background - Basic story you can get off website, but where are the senior investment professionals from? Why did they start their own fund, what do they think they can do better, what knowledge do they bring with them, etc. The VP isn't likely to have been doing this forever, so you should try to get a sense of why he took the risk to join this fund, if he came from another one. Did he work with the senior guys before? Why does he believe in them? Also, how old are the guys running the show? How successful have they been? On one hand, you want to work for a team of guys that have a track record, on the other hand, I would be nervous about going to work for 3 60 year old dudes that already have killed their careers, have 4 homes, etc., because they may not really be driving things.

How did the fund raising process go? Did they hit their target? Hard cap? Miss expectations? If they failed to raise their target, that should be a red flag to you. If it's an institutional LP base and they failed to raise their target, that means teams of people who solely focus on investing in funds found them wanting in some way or another. If they've been raising over the past 18 months, there's been a lot of capital that people have tried to get out the door, and shouldn't have been the most challenging fund raising environment.

Along with your question on fund life, ask about other fund structure items. Are they 2/20? Do they have some other structure? Give up GP economics to early backers?

Basic strategy. What industries, what size, stage, etc. Do the answers seem all over the place? That's probably a red flag

Get an overview of their processes. Do they have formal, multi-level check points with the investment committee (deal flash, pre IOI memo, pre LOI memo, final memo). How is the IC structured, what do they intent to present to the IC, etc. Getting a sense of how institutionalized their process is will go a long way in helping you get an understanding of how the fund may perform

Authored by: Certified Private Equity Professional - Vice PresidentCertified Private Equity Pro

slothsloth

Gorilla

saconsult3:
There's a ton you can ask, and these are just high-level categories laid out below. Some sound super obvious (you may be coming out of undergrad, in which case they may not be obvious), so apologies if it sounds like I'm oversimplifying things, but since they're not covered in your post I'm throwing them out there.
Team background - Basic story you can get off website, but where are the senior investment professionals from? Why did they start their own fund, what do they think they can do better, what knowledge do they bring with them, etc. The VP isn't likely to have been doing this forever, so you should try to get a sense of why he took the risk to join this fund, if he came from another one. Did he work with the senior guys before? Why does he believe in them? Also, how old are the guys running the show? How successful have they been? On one hand, you want to work for a team of guys that have a track record, on the other hand, I would be nervous about going to work for 3 60 year old dudes that already have killed their careers, have 4 homes, etc., because they may not really be driving things.

How did the fund raising process go? Did they hit their target? Hard cap? Miss expectations? If they failed to raise their target, that should be a red flag to you. If it's an institutional LP base and they failed to raise their target, that means teams of people who solely focus on investing in funds found them wanting in some way or another. If they've been raising over the past 18 months, there's been a lot of capital that people have tried to get out the door, and shouldn't have been the most challenging fund raising environment.

Along with your question on fund life, ask about other fund structure items. Are they 2/20? Do they have some other structure? Give up GP economics to early backers?

Basic strategy. What industries, what size, stage, etc. Do the answers seem all over the place? That's probably a red flag

Get an overview of their processes. Do they have formal, multi-level check points with the investment committee (deal flash, pre IOI memo, pre LOI memo, final memo). How is the IC structured, what do they intent to present to the IC, etc. Getting a sense of how institutionalized their process is will go a long way in helping you get an understanding of how the fund may perform

Wow this is immensely helpful. Thank you!

Array

3024

Chimp

really helpful, thanks a lot

slothsloth

Gorilla

saconsult3 Hey, would you mind I PM you please?

Array

saconsult3

King Kong

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