I don’t need to tell you, but I’ll do it anyway. The VC job market is extremely competitive. It’s common for hundreds of applicants to apply for any given role.
If you’ve made it to the interview stage, it means you’ve cleared one of the tallest hurdles in your VC job search. However, you’ve got a major challenge ahead of you in the interview.
Whether you’re just starting to break into venture capital or are a seasoned vet looking for a change of pace, this venture capital interview guide will help you understand what to expect. The guide is based on what I’ve learned from hundreds of VC job hunters who have told me about their interview experiences and more than 100 VC firms who have given me insight into their hiring processes.
Interested in a deeper dive in venture capital? Check out the VC SAFE & Convertible Debt Practice Problem for an Excel Workbook that shows you exactly how to model out a post-money SAFE.
What are VC interviewers looking for?
Let’s put ourselves in the mind of the venture capital firm hiring manager. The person conducting the interview could have as many as 15 or 20 interviews planned, all sandwiched between the other responsibilities of their job. Their time is valuable, and it’s in short supply.
As a result, the hiring manager is hoping to find out, quickly, what differentiates you from the other candidates and what kind of value you can deliver to their firm. The key to standing out lies in identifying your ‘sweet spot’ – the unique intersection of your 3 “P”’s:
- (P)rofessional experience
- (P)ersonal background
- (P)assions
Your professional experience encompasses your work history, roles, professional communities, and the significant industry shifts you’ve witnessed. Your personal background includes your upbringing, education, and family dynamics. Your passions are the activities you enjoy, topics you’re drawn to, and tasks you’d willingly do for free.
For instance, if you grew up in a sports-loving household, have a background in finance, and maintain a passion for athletics, your sweet spot might lie in investing in sports-related ventures. This unique blend of experiences and interests can guide your investment thesis and sector focus, setting you apart from other candidates.
Remember, your sweet spot is not just a tool for differentiation, but also a compass guiding your venture capital journey. It’s essential to identify and understand it early in your job search.
What to expect in venture capital interviews
Every interview is unique. Depending on your hiring manager’s style, the questions and the direction of the conversation could go in a number of different directions.
That said, some questions get asked more than others.
I asked readers of the VC careers email list:
“What question do you get asked most often in VC interviews?”
Most questions fell into these three categories:
- Background
- Investment thesis
- Sourcing and deal flow
In the following sections, I’ll break down some of the most common venture capital interview questions for each category. I’ll follow up with an explanation of why venture capital firms ask these questions, what to do, what not to do, and how you should structure your responses.
Common background questions asked by venture capital firms
“Tell me about yourself”
Alternative ways an interviewer might ask this question include “Walk me through your resume” and “Tell me about your experience.”
In a practical sense, interviewers ask this question as a conversation starter. If there’s anything you include in your answer that piques their interest, they’ll likely ask you a follow-up question. This question also tests your communication style and your ability to answer a broad question in a focused manner.
The worst thing you can do here is go through a long, tedious recap of your resume.
A great answer digs deeper. Think back to the ‘Sweet Spot’ we talked about earlier. How do your personal and professional passions intersect, and how have you used that to drive results? A classic example of this is a VC who is passionate about healthtech. Maybe there’s a personal reason they got into healthtech in the first place — a friend or loved one who received specialized care — and this inspired them to improve the quality of care in the industry.
A hook like this gives you a personalized answer that no one else can duplicate. If told well, it will also create an initial emotional connection with the interviewer. A VC firm will ultimately hire you on whether or not they believe you will add value to the firm, and a compelling answer here can help score you points both in the “culture value add” and “financial value add” categories.
Lastly, keep it brief. Your answer should be short enough that the interviewer can easily remember its major talking points. Don’t give them too much information. Give just enough to spark the conversation further.
How do you know if you’ve nailed it? It sounds a bit weird, but it works wonders. Record yourself. Watch it. And then think about where and how you can refine your answer. When I coach candidates, I recommend keeping their answer in the 90-120 second range. Remember, the best interviews are a dialog, not a monologue!
“Why VC?”
This question can also take the form of “Why don’t you become an entrepreneur?” or “Why not join a startup instead?”
In the “tell me about yourself” question, you provided background on the personal and professional motivations that drove you to choose the career path you chose. It’s meant to weed out candidates who either aren’t committed to VC or are choosing it for the wrong reasons.
A candidate who is trying to break into venture capital for the wrong reason is ultimately going to fizzle out. Take the example of a management consultant who’s tired of travel and building presentation decks, so she decides to explore a career in VC. If she finds herself doing the same thing, she’ll quickly lose motivation and will leave the fund.
The best answer here will:
- Show, instead of tell, why you’re interested in VC
- Re-iterate your ‘Sweet Spot’
Let’s go into more detail on the first bullet. “Playing ‘fake VC'” or showing that you can do the job before you have it is a powerful strategy for breaking into venture capital (VC). This approach helps you stand out from other candidates and provides a tangible demonstration of your potential as a VC. Some ways you can do this include:
- Blogging or posting on social media about tech and startup topics
- Organizing tech and startup events
- Making angel investments
- Mentoring startups
By doing any of these things, you’re not only positioning yourself for a VC job but also acquiring the skills and knowledge necessary for the role. It shows your commitment, passion, and understanding of the industry, and it provides evidence of your ability to identify promising startups, understand market trends, and build a strong professional network.
In essence, it shows that you’re not just interested in VC, but that you’re already immersed in the ecosystem and ready to hit the ground running.
Questions about your investment thesis
An investment thesis is a set of core ideas that drive a strategy that a VC firm uses to make money for its investors. For a practical example of this, take a look at Union Square Ventures’ investment theses.
When interviewing with a venture capital firm, it is very important that you have a well-defined thesis that you can easily communicate and defend. It is so important, in fact, that if you do not have this, there is virtually zero chance you’ll be hired. Don’t take my word for it, though. Here’s an email one of my readers sent me about this exact issue:
“What sectors are you most interested in, and why?”
There are a number of alternative ways an interviewer might ask this question, including:
- “What companies most excite you right now?”
- “What do you find interesting in tech/startups right now?”
This question is another conversation starter. Reply with a short, thirty second to one-minute answer that directly answers the interviewer’s question, and be prepared for it to lead into a conversation exploring your answer. A good interview should feel more like an engaging conversation and less like one person peppering the other with questions.
Remember Goldilocks and her porridge when giving your answer. It shouldn’t be too general (“fintech”). It shouldn’t be too narrow (“fintech payments for Eastern Poland”). What it should be is just right (“fintech cross-border payments”). Focus on one or two subsectors and know them like the back of your hand – major players, trends, recent VC funding announcements, and outlook on the next 5-10 years.
“Are there any investments of ours that you like?”
This question is meant to prod a few different areas. First, did you do your homework? Before any interview, you should develop a familiarity with the firm’s portfolio and its competitors and be ready to discuss them in the context of your investment thesis. This is a chance to showcase your knowledge of the VC industry and the unique value you can deliver.
Sourcing and deal flow questions
We’ll wrap things up by covering one last question. Firms will typically want to learn more about your process for finding interesting startups.
“How do you source deals?”
This one really gets to the heart of it, doesn’t it? The interviewer wants to know if you have the network and the approach to help them develop high quality deals that they would’ve otherwise missed.
Other ways to ask this question include:
- “Tell me more about your network”
- “How would you source a deal in (a certain geography)?”
The worst thing you can do here is say that you’ll use publicly available data sources as the backbone of your due diligence (after all, anyone can use TechCrunch). Instead, the best answer speaks to your personal connections in a specific sub-sector or startup ecosystem. For example, do you know any founders or leaders at accelerators that can give the firm the inside track on which startups in the current batch are the most promising?
Even better, can you speak to any recent examples of a recent deal that you sourced via one of those relationships? You might be surprised to learn that it also counts if you sourced a company for someone else to invest in. Because no one expects you to be personally writing checks just yet, especially if you’re actively looking for your first VC job.
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Key takeaways
- The VC job market is highly competitive – To make it to the interview stage is an achievement in itself given that there are usually several hundred applicants for any open role.
- Interviewers seek differentiation – Time is precious for venture capital hiring managers, and they are keen to quickly discover what sets you apart from other candidates. To stand out in the interview, understanding your unique blend of professional experience, personal background, and passions – your “sweet spot” – is key.
- VC interviews usually hit 1 or more of these common question categories – About your background, investment thesis, and deal flow sources.
- Professional and personal motivations matter – Questions like “Tell me about yourself” and “Why VC?” are meant to delve deeper into your motivations for choosing a career in venture capital. Successful answers will demonstrate your commitment, passion, and understanding of the VC industry.
- Your investment thesis should be well-defined and defendable – The interviewer is likely to probe your investment thesis by asking about your sectors of interest and their own investments that you like. Being knowledgeable about the VC firm’s portfolio and having a clear, well-articulated thesis can set you apart.
- Deal sourcing skills are critical – The interviewer will want to understand your network and your approach to finding interesting startups. The strength of your answer will lie in your ability to demonstrate your unique connections within a specific sub-sector or startup ecosystem.
Ultimately, the VC firm wants to know if you will help them invest in companies that they wouldn’t have invested in otherwise. Your interview is an opportunity to show them that you can do just that.
Download the SAFE Practice Problem for more help preparing for your interview. It’s a detailed Excel Workbook that shows you how to model convertible note + SAFE financing, conversion, and more.