Woke up on sunday morning and thought I should write a post today detailing the checklist of items to prepare before heading into a Venture Capital Interview. This proves that I am in snowy Philly with nothing better to think of that this amazing field of Venture capital. So here goes:
1. Fund Profile - Look at the commited capital, past performance, news articles related to the fund, and buzz in the market. Do you diligence on the fund as if you were doing diligence on a potential investment for the fund. After all, it is an investment into your career.
2. Partner Backgrounds - Read the bios closely. Note down points of convergence in your backgrounds and interests with theirs. If you find nothing, do not panic but if you find something be sure to bring it up in your interviews. Also, look out for red herrings. If you are interviewing with a ex-banker for a growth stage fund, you might get many more financial engineering questions than regular investment thesis questions.
3. Know thy Resume - It is amazing how few people get this in its entirity. When one heads into an interview, expect discussions on everything under the sun. If you had a gig in EDA (Electronic Design Automation for the uninitiated), you should expect a question about the industry in general, growth prospects, and investment ideas even though this may not be something you have worked much on, or thought a lot about.
4. Think about your Investment Philosophy - Mine is "Team, Problem, Solution (Plan B), Economics, Exit". Obviously, there is a lot more to it than just those five words however it is good to have a succint way of putting across your investment philosophy. Back it up with ideas, good VC practices, and practical insights. This is the question one gets asked a lot so we need to ensure that we can provide answers beyond mere cliches.
5. Read up those VC Bulk Packs - If you are at Wharton, then go buy the Venture Capital and Financial Innovation textbook or bulkpack, and read it from cover to cover. Be sure you understand how term sheets are structured. Be exposed to the various VC financial and legal jargon. Not knowing what a cap table is might not be the end of it but will definitely hamper your chances.
6. Venture related Extra-curriculars - If you have done any study project for a local VC, worked on any deals on a part-time basis, internships etc, then be sure to highlight them, read up on them, and talk about them in your interview. Nothing builds more credibility in front of a Venture Capitalist than prior VC experience.
7. Investment Thesis - This is probably the make or break part of your interview. Line up atleast 3-5 different investment ideas in the areas you are positioning yourselves in. For ex:
I position myself as a Semi/Wireless/Mobile Services guy, hence I have investment theses in:
a. Mobile Ads
b. Mobile Video
c. Mobile DIY
d. Semiconductor (Chips and chip technology)
e. Broadband Wireless Technologies
f. Mobile Computing
g. Others (a big bucket for the various other ideas that I have in spaces as diverse as Network Storage to Internet Services)
When thinking about an investment thesis, concentrate on three aspects:
- Viability (Market, Competition, etc)
- Existing Startups in that space
- Any new startups that have not gotten funding yet.
After all, nothing gets a VC's attention more than a funding idea.
If you do all this and more, then you can sit around for months waiting for that elusive call. And the Kafkaesque search will start.