I recently participated in the application process for an Investment Associate role with an international venture capital firm. Given the firm’s distributed workforce, the recruitment process was unique. It allowed me to see firsthand some of the things VCs will look for when reviewing a candidate. I will note that most venture capital roles are NOT remote. In general, VC firms staff individuals close to the firm’s office. The reason for this is that VC firms typically have a small tight-knit team with a flat organizational structure. The proximity of individuals allows for closer collaboration and deliberation over investments. The exception to this rule is when a VC firm targets specific markets or verticals in their thesis in which a remote city has a high deal flow. This reality hasn’t changed too much, even with the recent remote-first movement brought on by COVID-19.
Even though this interview process was fully remote, the content prepared me for what I would encounter in a typical VC interview. The firm introduced specific questions and topics one might encounter in an in-person interview early on in the application process to weed out candidates. Below, I highlight the main parts of my experience. Then I outline some tips to help prepare you for what you will encounter in a typical venture capital interview process.
Part 1: The Application
Like many companies, this firm had an online career page directly on their website. I applied for the “Venture Capital Associate,” and I submitted my resume, cover letter, and general information about myself and experience. Nothing stood out in this part of the process, but it reinforced that my resume is the first impression of what someone sees about me. It’s essential to make sure your resume is as close to perfect as possible, with legible, relevant, and concise information. Think of it as a movie trailer, and you’re trying to convince the recruiter to come to see the film: YOU! Joel Palathinkal does regular resume office hours with members of his cohort at Sutton Capital, which you can sign up for here.
Part 2: The Skills Assessment
A brief time after I submitted my application, the firm invited me to participate in the next section of the interview. I was provided a link to a timed skills assessment that focuses on the candidate’s ability to use logic and reasoning skills to solve problems. I was allowed 20 minutes to answer 40 questions. Although the assessment felt high pressure due to the time allotment, the questions were relatively basic math skills. Here’s an example (not an exact quote): If item A sells for $500 usually, but is on promotion for a 30% discount, how much is item A now? The test included multiple choice answers, which in this case would be $350. It’s important to remember that VC, at its core, is a finance and heavy metric industry. Make sure you’ve brushed up on your basic math (particularly business math).
Part 3: The Personality Test
After the skills assessment, I took the personality test online. This test reflected many other personality tests I’ve taken before (Myers Briggs, Big 5, Enneagram) to determine my core competencies. The exam made a statement about a specific behavior such as “I worry a lot about the future,” and I was to mark on a scale whether or not I agree or disagree with the statement. My most notable traits were:
Sound like me?
Part 4: The Case Study
After I had completed the above assessments, I was to complete an online case study. This case study provided me with a downloadable Google Sheet document with a fake startup’s data. Using this data, I had 2 1/2 hours to calculate KPIs and answer the case study questions. An example of a problem was: over X period, what was your average conversion to paying customers. I had multiple choice answers and space to provide how I arrived at my response. I also had to create a 1-page pitch deck, a pitch email to a VC, and describe my investing thought process. Lastly, I had to recommend three companies that would fit the firm’s portfolio.
This portion of the application was by far the most eye-opening for the entire process. It highlighted some key things the firm was looking for, technical skills, such as KPI calculations, and general knowledge on VC and startups.
Conclusion and Key Takeaways
In the end, I didn’t move forward in the application process. One thing to remember is how competitive VC positions are. It’s essential to look at each interview experience as an opportunity to network and learn skills that will better equip you for the next interview. This process did just that, and some key summaries and takeaways are below:
- Make sure your resume is relevant for the role; this is the first thing anyone will see.
- Know your startup KPIs and calculations: LTC, CAC, conversion, MRR/ARR, churn, etc.
- Know your finance and accounting basics and how to evaluate a company.
- Be prepared to talk about a vertical, industry, and several companies that interest you. Show you are passionate about a particular area and provide companies that will fit the interviewing firm’s investment thesis.
- Don’t let rejection deter you. Each interview is a learning experience.