Breaking into Venture Capital: Interview Tips, Tricks & Templates

This post originally appeared on the Femstreet blog and has been republished with permission.

‍

Despite the job market being in flux currently, most venture capital firms’ hiring plans remain relatively unchanged for the remainder of the year. Venture Capital (VC) is a notoriously tough industry to break into — but the current climate may present as many opportunities as challenges with the right preparation.

Getting hired at a top tier VC is highly competitive. There is no formula: no specific college major work experience or skill set that is clearly a significant factor in contributing to success in the industry. This, in turn, makes the VC interview process a challenging one for which to prepare.

I myself had to go through the interview process just two years ago. I started Femstreet before I entered VC, and although the newsletter certainly helped me to get on VC radars, it was still not an easy ride and required endurance, the right resources, and preparation. Now that I am on the other side, I want to pay it forward — providing our members’ community with the insights and information they need to put their best foot forward into the VC process.

To start, here are my top five tips for getting a job in venture:

1. Give, give, give before you ask for anything. Send VCs deal flow, host dinners with founders, organize virtual meetups with industry experts or try to support firms with diligence calls when they have questions that are aligned with your experience. Show a freemium version of yourself.
2. Showcase the calibre of your thoughts publicly. A lot of people get in through content creation, including memes (not sure I’d recommend that route). Harry Stebbings got into VC through podcasting, just as I did through a newsletter. There are loads of blogger VCs, and even if you are just curating content, people love newsletters with a personal touch.
3. It’s all about relationships. Venture capital is an industry built on trust and reputation. Lean into your existing networks and build them out.
4. Do your homework. If you are interviewing at a SaaS focused or consumer-focused fund, make sure you have a good understanding of the standard SaaS and consumer metrics, exit multiples and go deep in your research in one sector. Make sure to check the partners’ background, know their portfolio companies and prepare specific questions. I’d also recommend speaking to founders they have backed.
5. Practice makes the master. Don’t expect to get a job offer after your first interviews. Instead, use them to learn about the industry, build relationships and then practice, practice, practice.

The key to creating a framework for preparing for interviews is to ensure you are prepared to answer questions that cover each of the below elements:

• Who: Who are you and why are you a good fit for the role and the firm?
• What: What makes you qualified for the role? What evidence can you provide to support that?
• Where: Where have you succeeded and struggled? What did you learn from those experiences?
• Why: Why this role at this firm? Why did you choose your past roles?
• How: How will you contribute to the firm?

I am here with Austin Guy and JJ MacLean from GoingVC, a professional development program and global community helping its members advance their careers in Venture Capital. GoingVC brings together experts in venture capital, entrepreneurship, and business and fosters a collaborative environment where future leaders of the industry can learn and build on the essential skills they’ll need for success in the field.

While they prepare to release The GoingVC Venture Capital Interview Guide, we wanted to go over some of the most common questions that come up in VC interviews and how to get ready for them.

Femstreet (F): Let’s start with the basics, how would you answer: ‘Why do you want to work in venture capital? Why right now?’

Austin (AG): Great start. This is one you can almost guarantee will be in any interview. A key here is to express what excites you about the VC industry. Is it getting to work with a variety of startups? Or help bring new companies into the world? Jot down a few things alongside the skills you’ve acquired thus far throughout your career and then tie them together into an upward arc that ends with VC being the next logical step. Here’s what this might look like:

“I want to open doors for founders and have a general interest in understanding the challenges that entrepreneurs in tech startups face. VC is a people business and it’s a privilege to be meeting and working with exceptional entrepreneurs, building relationships with founders, talking with them about their products and vision and our future. I am curious about disruptive technologies, companies, business models, people and ways to create sustainable value.”

JJ: If you can, talk about past situations where you had to quickly identify and evaluate new opportunities, assimilate new information and other skills that are at the heart of what VCs do.

Of course, it also goes without saying that you should have a solid grasp of the basics of the industry before going into any interview. If the firm has a blog, be sure to read it to understand their perspective of the industry as well and find ways to align your perspective with theirs to show how VC is not only a fit for your skills, but you are a fit with their firm.

F: Expanding on that, what about: ‘Why VC as opposed to an operational role with a startup or launch your own company?’

JJ: This question, I can almost guarantee, will be asked in any interview. A lot of what we said above will definitely apply but this is a really great question to ask yourself before you even begin applying to roles in VC because having an understanding of how VC works often comes from having hands-on experience running the operations of a company. So ask yourself first if you feel like you have that experience (whether directly or indirectly), and if not, consider that as a first path to VC.

AG: If you do, you should be able to articulate why moving into the more general realm of VC makes sense. As we mentioned earlier, it’s an opportunity to help more founders, build new skills, learn a new industry and from a different perspective.

F: What about ‘where do you want to be in five-years?’

JJ: VC has a typical career path in terms of starting from Associates to eventually becoming a partner. Junior VC roles typically come with fixed lengths. You’re not committing to anything here, but you should give it some thought. Do you want to stay in venture? Join a startup? Get your MBA? Think about what you might want to focus on at the firm and where that would lead to next. If it’s a pre-MBA role going to get your MBA next is an easy answer, but it’s still a good idea to take some time to think about why you’d want to do that next.

AG: Look at how VCs spend their time. While the obvious is the day-to-day as it relates to working with portfolio companies, raising new funds, and deal sourcing, VCs often acquire board seats, work with philanthropic causes, author content, and more. How would those ancillary roles fit into your career over the next five years?

F: What about past roles? How would you prepare for questions like: ‘What were you responsible for in your last job?’ or ‘what did you like/not like about it?’

JJ: Practice your storytelling! All great VCs are excellent storytellers. There’s no right or wrong approach to approach these sorts of questions, but one way we find helpful at GoingVC for any ‘tell me about a time when…’ is the STAR-(L/P) Framework.

• Situation — what was the event or challenge?
• Task — what were you responsible for?
• Action — what steps did you take, or how did you solve the problem?
• Result — what was the outcome of the event/problem?
• Learning/Planning — what did you learn from the situation or how planning on exploring it further?

Write down a few points for each section of the framework and then assemble them into a cohesive answer. Your time in the interview will be limited so stick to the main points and don’t get bogged down in the details.

AG: Yes — brevity is important!

F: How should people talk about their most significant strengths and challenges?

AG: Another great one, and glad you brought up challenges here because no one is perfect, and the VC industry is one that is often defined by its failures.

Be genuine, and don’t pretend your career has been easy up to this point. Get specific about why the challenges you faced were challenging and end with a positive take on the situation. If the startup you worked on failed, go over the lessons you learned. If investments (whether real or paper) didn’t turn out as expected, talk about any flags you retrospectively missed. Owning your failures and challenges and talking about how you overcame them demonstrates resilience and an ability to course correct both critical skills in an industry often shaped by failure.

JJ: When it comes to your strengths, it’s time to be proud and wave the flag! Where do you think you excel? Try and relate it to the job, but VC roles are pretty multidisciplinary, so don’t worry too much if you’ve got some non-traditional superstar skills to highlight.

F: Continuing on that last comment, another common question is, ‘tell us something we don’t know from your resume?’ Can you talk about why it’s essential to get that one right?

JJ: Totally! It’s pretty simple, actually. VC teams are often pretty small, making it critical that they’re all able to relate to, work with, and grow with each other. It’s also an industry that thrives on betting against conventional wisdom. Talking about your life outside of your professional experience can help fill in your potential teammates on the person they might be working with. How fun and rewarding it’ll be, as well as the different point-of-views you’ll bring to the table — so be honest, bring your whole self, and (of course) come prepared with some stories to share.

AG: At GoingVC we actively recruit people from different backgrounds because we value the diversity of ideas and experiences it brings to the collective community. Great VC firms operate in a similar way, so be sure to express what you’ve done outside of the day-to-day of your professional roles that would apply. These are things like side hustles, attending networking events, enrolling in online classes, learning new technologies — what outside of work do you do that you might be paid to do as a VC?

F: How about: ‘what do you expect your day today in the role to look like?’

JJ: Do your homework! If you can, try and meet up with a past or present associate from the firm for coffee. Read the firm’s blog, check out people on the team on social media, subscribe to their newsletter, and look for clues. What processes do they talk about, what conferences do they go to, what have they been funding recently? Try and put together a picture of what that means in terms of how they spend their time.

F: Yes! Doing your homework before each interview is an essential part of the process. Another common type of question you should prepare for is: ‘Why our firm?’ or ‘How are we different from our competitors?’. How would you prepare for that, and why is attention to detail so important?

JJ: Great question! The important thing to remember with these sorts of questions is that there’s no right or wrong answer. The interview is an opportunity for you and the fund to find out if there’s a match between your interests/desires/skills and what they need.

AG: Read up on the firm (and as JJ said, best if you connect with current or former employees) and ask yourself what’s attractive about it? Their culture or reputation? The geographies or types of companies they invest in? Is there a certain individual that embodies the type of career path you have in mind or would like to work with or have as a mentor? Keep in mind, however, that while most VC teams are small, you may not interact with that person on every deal or project, so be sure the broader culture is one you resonate with. In terms of a checklist of items to ensure you have researched, we recommend focusing on fund performance (IRR or estimated historical returns), the reputation of the fund partners among founders, and the philosophy of the fund and the fund’s focus.

JJ: Every VC will tell you they have some sort of competitive advantage, but few rarely do. There has been lots of research documenting the fact that the majority of returns in the industry are earned by the minority of VCs. What do those GPs do better than the rest? Does this firm have something similar? This is where doing your homework on their process, their management, the portfolio companies, and what is essentially their brand pays off.

AG: A lot of this is anecdotal and can be obtained through networking within the community but a lot can be learned from their own content if it’s available.

F: Another firm-specific question I always prepared for was: ‘which of our portfolio companies are you most excited about?’ it’s flipside, ‘which would you have passed on?’ was often a little harder. How would you approach those?

JJ: Pick out a couple of portfolio companies, ideally in a sector you’re excited about, and develop your own opinions. Play around with the products, if you can. What differentiates them from their competitors? How fast are the markets growing? What are the potential roadblocks?

Next, ask yourself if there’s anything you would have missed or misunderstood in the past? Hindsight is 20/20, but try and put yourself in the shoes of someone without what you know today. How big did the market look when the company was founded? Was the problem obvious? Did the solution seem infeasible either technically or because it required a big change in behavior?

AG: Here’s an example:

“I probably would have passed on BigCityTech because their target market was real estate brokers. My thoughts would have been that the increasing number of homebuyers looking online, combined with giant property aggregators pushing commissions down, would have been a huge barrier to strong rapid growth. What I would have failed to see though was how the company was creating an entirely new business model around home selling with significant benefits to both buyers & sellers. I’d love to learn more about their go-to-market strategy and how they approached creating and scaling the business now that I can see the huge problem they’re working on.”

F: What about questions around sector expertise?

JJ: This line of questioning can be intimidating for a lot of people. It can feel like the only way to be prepared is to spend hours and hours researching a dozen exciting-sounding companies across a handful of sectors.

AG: At GoingVC we strongly recommend a different approach: Go for depth, not breadth. Pick a single sector you’re excited about (and is within the firm’s comfort area) and dive into a couple of companies in the space. Try their product, talk to the founders if you can. Come prepared to articulate why you think they’ll grow rapidly. If you have enough time, we’d definitely recommend putting together an investment thesis. When pitching a sector, focus on these items: an introduction to what it is and what types of businesses operate within it, one to two area(s) of opportunity (i.e. the problems) and why they matter, the solutions, who is leading the efforts to solve the problems, and a couple of reasons why they’re the best bets in the space to emerge as the leaders. Here’s how I might pitch a sector, sticking with Proptech:

“I am very interested in the Proptech industry. Real estate is the largest asset class in the world but suffers from outdated technology and particularly when buying and selling homes, a lack of transparency and speed. A company that is making serious progress in this space is Qualia, a platform that enables agents, their clients, and title companies to share in the closing process, making it easy for everyone to stay on track, record transactions, and reduce friction to what is often a very challenging process. They have already integrated with many of the largest title companies across the country and are continuing to expand.”

F: And pitching a startup?

JJ: Similar to the above, come prepared with two or three different answers. Dig deep and try and find something beyond the big names or ones that have recently been in the news headlines. Bonus points if you can articulate why you think others might be undervaluing the company or its growth trajectory!

Your pitch will vary a little depending on the type of company you’re talking about, but at a minimum, we’d recommend you include:

• The problem they’re working on, their solution and why you think it’s significant
• The core team
• Why now? Why hasn’t anyone solved this problem before
• The target market, and key competitors
• Their traction so far
• What excites you about the company and potential flags/negatives
• How you think it fits within the firm’s strategy

Make sure you talk about the problem the company’s working on (and why you think it’s significant), their team, traction, competitors, what excites you about it, and how it fits within the firm’s strategy.

F: Expanding on that, how would you prepare for questions on due diligence? What critical things do you look for?

AG: Really great question. The due diligence process is part science, part art. There are certain things you’ll almost always want to look at, but it’s not just a simple checklist. Different aspects of a company will be more or less important depending on the sector or type of company, and every firm has its own strategy as well.

Read up on diligence in the sectors you’ve prepared to talk about, and see what you can glean about the firm’s approach as well. Can you spot any patterns in their portfolio companies when it comes to things like traction, market, future funding requirements, or technology? What seems to be the key factors for them? At a minimum, though we recommend you include:

• An initial screening process to ensure companies fit with the fund’s views on any sectors, geographies, and/or stage
• An estimation of the Total Addressable Market size
• A review of the strengths and weaknesses of the founding team
• Assessment of the product and relevant KPIs and metrics
• Uncover if there are any potential competitive advantages being developed
• A review of financial projections for reasonability and soundness

F: And your top questions in a first founder meeting?

JJ: Like the rest of the diligence process, this will vary from company to company, but for an initial first meeting, there will be a few questions you’ll always want to ask. Run through the typical screening questions like the problem/solution they’re working on, how big they think the market will be (and how they came up with that), but then dive deeper. How did the team meet, what are their backstories, how do they intend to build a durable competitive advantage? Another great one is ‘why now.’

AG: Because I think a natural follow up might be, “Where should candidates focus” let me add that questions about the team should be primary. A company is always the sum of the efforts of a team. Especially when investing at the earlier stage of the spectrum, the team may be all that exists. Talking to the founders about the team makeup, the skills, the fit, and the experience can help determine who might be best equipped to not only solve the team problem they have identified but handle unforeseen challenges that face every startup.

JJ: Take some time to think about what you’d want to know to decide whether to spend more time digging into the company. A typical VC will look at hundreds of companies a year, and like Beyoncé, they too only have 24 hours in a day. Building up an ability to quickly figure out which companies to look into more is an important skill.

F: Lola from Hummingbird VC published this great list of VC resources: what other resources would you recommend?

AG: We’re avid readers of who we think are the best thought leaders in our industry, many of whom are covered in that list (especially Andrew Chen, Benedict Evans, StrictlyVC, and Stratechery, to name a few). Outside of that, The Secrets of Sand Hill Road by Scott Kupor and Breaking into VC by Bradley Miles are great VC books.

I’m a big fan of trying to read up on a bunch of different genres and topics, and some of my favorites the last couple years are Crossing the Chasm (Moore), Invisible Influence (Berger), Atomic Habits (Clear), Platform Revolution (Choudary), The Culture Code (Coyle), Machine, Platform, Crowd (McAfee), and How To Create A Mind (Kurzweil). Those should give anyone Amazon recommendations for years on all relevant topics from better work habits to the future of AI!

JJ: Love all those! Another book that I think is an absolute classic is Venture Deals by Brad Feld and Jason Mendelson and if you’re looking for something with more of an academic spin the Business of Venture Capital by Mahendra Ramsinghani. If you like history, Creative Capital by Spencer Ante is also a great read and gives a compelling background on the development of the industry. I’m also a really big fan of Shane Parrish at Farnam Street, especially his book series on Mental Models and Tom Seides podcast Capital Allocators if you want some insight into the LP perspective.

Finally, Sarah earlier touched on the importance of sharing your thoughts publicly, if you’re not sure where to start one resource I think is really great is the Holloway Guide to using Twitter.

F: Core to a VCs job is being able to pick out and invest in the most promising startups. However, you can’t invest in the best if you never have a chance to meet them leading to the common question: ‘how would you source companies?’. What do firms want to hear?

JJ: The obvious (and important) answer is to start or continue building out your network. Great VCs are known for having incredible networks and relying on them to source credible deals. Think about who in your current network could help provide deal flow, and how could you bolster it.

AG: Don’t forget to think about ways beyond your network as well! Could you build a tool, or start a newsletter? Help new entrepreneurs by offering to lend a hand if you’ve got relevant skills? Take some time to see if you can think up any different or unique ways of building a relationship.

F: What about the other end of the investment lifecycle — how do I prepare for the questions about the IPO or M&A market?

AG: Signing up for newsletters and staying informed can be helpful here. Publications like TechCrunch, Hacker News, Crunchbase, and CBInsights do a lot of reporting on deals, exits, and the general condition of the IPO/exit marketplace. The best idea is to read the S-1s of companies that have recently filed to go public. Don’t let yourself get bogged down trying to read them all, however. You can get to the salient points pretty quickly in those documents that cover the goals of the company and the historical financial performance.

JJ: Beyond developing a general understanding of the IPO/M&A landscape, we’d also recommend picking a couple of recent exits, ideally companies you’ve followed for a while and diving deeper into them. Come prepared to talk about their progress and how they’ve evolved. Shout out to Tomasz Tunguz and his newsletter here, too.

F: Before we wrap up, every interview should leave time for the interviewee to ask some questions. What questions would you recommend asking the interviewer if given the opportunity?

JJ: Thank you for this question. It’s important to remember here that the interview process isn’t a one-way street. You’re taking the time to learn more about each other. Ask yourself what would be important to you in the role that you don’t know already? That said if you’ve done your homework and feel pretty well informed already here are a few of our favorites:

• Is there anything about the role and/or firm that I should know that we haven’t talked about?
• Which companies are you most excited about within the portfolio?
• What non-obvious competitive advantage do you feel your team has?
• Have you considered expanding beyond the verticals, stages, or other specifics to expand deal flow?
• How do you think about ownership when it comes to the term sheet? What are your views on determining equity allocation, caps and discounts, hurdle rates, etc?

‍

Trusted by readers at leading tech companies and venture capital firms globally, Femstreet is the go-to, curated editorial featuring must-read content by female founders, operators and investors. Femstreet’s online community allows professionals to connect with and learn from peers and experts, leverage resources and discover career opportunities.

‍