Venture Capital interview preparation

Questions

100

Traced to a firm

31

Firms

12

Updated

September 2026

Asked at

All firmsGeneral Atlantic9Insight Partners7Silver Lake6Vista Equity Partners4Bessemer Venture Partners3ACAccel2Advent International2Battery Ventures2Andreessen Horowitz1Coatue Management1Sequoia Capital1WPWarburg Pincus1

Topic

All topicsSourcing and deal flow5Market sizing and estimation8Founders and teams5Unit economics and cohorts11Term sheets12Cap table and dilution7Early-stage valuation7Portfolio construction6Board and governance4Down rounds and secondaries4Exits and liquidity4Fund economics5Sector theses and markets6India venture market6Fit and motivation10

Level

AnyCoreIntermediateHard

Type

AnyTechnicalFitCaseMarket viewBrainteaser

1. 053What is an LBO?Early-stage valuationCorephone / first roundAdvent InternationalTechnology, Media and Telecom · Palo Alto · 2020

   Say this

   Buying a company using mostly borrowed money, where the target's own cash flows service the debt. You put in a slice of equity, pay down debt over the hold with the company's cash generation, then sell — and your return comes from deleveraging, EBITDA growth and any multiple expansion.

   Then walk it

   1. Structure: a typical deal is 40 to 60 percent equity today, the rest debt, secured against the target's assets and cash flows. The debt sits on the company, not the fund.
   2. The three return drivers, and you should always name all three. Deleveraging: every rupee of debt repaid converts directly into equity value at a constant enterprise value. EBITDA growth: revenue growth plus margin improvement. Multiple expansion: exiting at a higher multiple than you paid, which is the least controllable and the one you should never underwrite.
   3. Worked version. Buy at 10x $50m of EBITDA, so $500m, with $200m equity and $300m debt. Five years later EBITDA is $75m, debt is down to $150m. Exit at 10x is $750m, less $150m of debt, so $600m of equity on $200m in. That is 3x, roughly a 25 percent IRR, with no multiple expansion assumed at all.
   4. What makes a good LBO candidate: stable, predictable cash flows, low capital intensity, a defensible market position, hard assets or contracted revenue to lend against, and an identifiable operational improvement. Cyclical, capex-heavy or pre-profit businesses are bad candidates.
   5. Why a venture investor should know this: it is increasingly the exit path. Software companies at $50m of ARR with slowing growth and positive cash flow are now bought by software-focused buyout funds rather than IPO'ing, so the LBO maths sets the floor price for a lot of venture-backed companies. Vista and Thoma Bravo have taken dozens of them private.
   6. The obvious limitation: leverage magnifies both directions. The same structure that turns a 10 percent EBITDA gain into a 30 percent equity gain turns a modest miss into a covenant breach, and it is the reason buyout funds will not touch a business whose revenue can fall 30 percent in a quarter.

   Where candidates lose it

   Describing the debt and stopping. Name the three return drivers explicitly — deleveraging, EBITDA growth, multiple expansion — because that is what the question is checking. And in a venture or growth interview, connect it to the exit path for software companies, which is why they are asking a VC candidate about LBOs at all.

   Expect next

   • What makes a good LBO candidate?
   • Which of the three return drivers matters most?
   • Why does an early-stage investor need to understand this?

   Reported by candidates at Advent International (Technology, Media and Telecom, Palo Alto, 2020). Source: Wall Street Oasis.

2. 100What was your favourite subject, your least favourite, and the hardest one?Fit and motivationCorephone / first roundAdvent InternationalTechnology, Media and Telecom · Palo Alto · 2020

   Say this

   Answer all three honestly with a reason attached to each, and make the hardest one the interesting answer — what you did about it. Do not name a finance subject as your favourite just because you are in a finance interview.

   Then walk it

   1. Favourite: say why in terms of how you think, not the grade. 'Economic history, because it was the only course where the answer depended on which mechanism you believed rather than which formula you applied' tells them something about you.
   2. Least favourite: pick something real and give a reason that is about the subject rather than about you being bad at it. Avoid naming a core skill for this job — saying you hated accounting in an investing interview creates a problem you then have to talk your way out of.
   3. Hardest: this is the one that matters, because the follow-up is always what you did about it. Name the subject, why it was hard, the specific thing you changed, and the outcome — including if the outcome was mediocre. A candidate who worked hard at something and got a B is more credible than one who claims everything was easy.
   4. The consistency test: your three answers should be coherent with each other and with the rest of the interview. If your favourite subject is nothing like the work you say you want to do, expect to be asked about it.
   5. Keep it to sixty seconds for all three. This is a warm-up question and long answers signal you cannot read a room.
   6. And if your academic record has an obvious weak spot, this is a good moment to address it briefly and without defensiveness. Pre-empting it once is far better than being asked about it later, and it never sounds worse coming from you first.

   Where candidates lose it

   Naming finance or accounting as your favourite because you think it is what they want to hear. It is transparent, and the follow-up questions will expose it. The other trap is claiming nothing was hard, which either reads as a lack of self-awareness or as never having been stretched — both bad in a job where you will be out of your depth regularly.

   Expect next

   • What did you actually do to get through the hard one?
   • What would you study if you went back now?
   • Why did you not study something more quantitative?

   Reported by candidates at Advent International (Technology, Media and Telecom, Palo Alto, 2020). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.