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. 001How do you source companies?Sourcing and deal flowIntermediatephone / first roundGeneral AtlanticTechnology, Media and Telecom · New York · 2016General AtlanticGeneralist · Beijing · 2014

   Say this

   Thesis first, then a systematic channel to work that thesis, then relationships that make the outreach land. I would not describe sourcing as networking, because networking has no denominator. It is a funnel you can count.

   Then walk it

   1. Start with a thesis: a market shift you believe in, written as a sentence. 'Vertical SaaS for Indian pharma distribution' is a thesis. 'Interesting AI companies' is not.
   2. Then map the space exhaustively. Every company in the category, from Tracxn, Crunchbase, app-store rankings, GitHub stars, job postings, conference speaker lists. Twenty to fifty names, not five.
   3. Rank them on signals you can see from outside: hiring velocity, web traffic trend, review volume, who the angels were. The last one matters most early: a great seed round with three operator angels from the same category is a real signal.
   4. Then outbound. A specific, short email that shows you have used the product and understand the wedge. Response rates on a thesis-led email run several times higher than a generic one, and founders talk to each other about which VCs send lazy notes.
   5. Relationships are the compounding layer on top, not the substitute for it. The best repeat channel is founders you already backed, and second-time founders from companies in your thesis.
   6. And keep the denominator. I would track companies mapped, first meetings taken, second meetings, term sheets. If the conversion from first meeting to second is under a fifth, my filter is wrong, not my outreach.

   Where candidates lose it

   Answering 'I'd use my network and go to events'. That tells the interviewer nothing and describes what everybody already does. They want a repeatable process with a thesis at the front and a number at the back. Name real tools and one live thesis you are working.

   Expect next

   • Give me a thesis you are working right now and the ten companies in it.
   • How would you source in a sector where you have no network at all?
   • What is your reply rate on cold outbound, and what makes it better?

   Reported by candidates at General Atlantic (Technology, Media and Telecom, New York, 2016); General Atlantic (Generalist, Beijing, 2014). Source: Wall Street Oasis.

2. 017How do you reference-check a founder?Founders and teamsIntermediatetechnicalGrowth equityEarly-stage VC

   Say this

   Off-list references are the only ones that matter, and the useful calls are with people who worked for the founder rather than above them. On-list references tell you the founder can pick three friends.

   Then walk it

   1. Get the list, call it quickly, and treat it as a formality. Then build your own list: former direct reports, a co-founder they parted from, customers who churned, and an investor from a previous company.
   2. Direct reports are the highest-signal call. Ask whether they would join this founder again, and listen to the pause before the answer. Ask who else on the team should I talk to, which quietly widens the list.
   3. Ask behavioural, not evaluative, questions. Not 'is she a good leader' but 'tell me about a time she changed her mind' and 'what happened the last time the company missed a quarter'. Stories are checkable; adjectives are not.
   4. Always ask the negative directly: 'what is the thing that will frustrate their next investor?' Referees will tell you, but only if you ask in a way that gives them permission.
   5. Then triangulate with customer calls, which for growth-stage deals are worth more than the founder references. Ask what would make them switch away and what the renewal conversation actually looked like.
   6. The limitation: references are systematically positive because the network is small and nobody wants to torch a relationship. So I read them for the shape of the concerns rather than a verdict, and I weight one specific negative story over five glowing generalities.

   Where candidates lose it

   Only calling the list you were given, and asking questions that can be answered with 'yes, she's great'. Also forgetting that founders find out you called. Off-list references need handling with judgement, especially with a live process and a signed term sheet in the market.

   Expect next

   • What would you do if one off-list reference was strongly negative?
   • How do you reference-check without damaging the relationship?
   • What do you ask a customer that you cannot ask the founder?
3. 020What is the burn multiple and why do investors like it?Unit economics and cohortsIntermediatetechnicalGrowth equityLate-stage VC

   Say this

   Net burn divided by net new annual recurring revenue over the same period. It answers one question: how many dollars did you set on fire to buy a dollar of new recurring revenue. Under 1.5 is excellent, 1.5 to 2 is fine, above 3 means the growth is bought rather than earned.

   Then walk it

   1. The calculation: if you burned $12m in a year and added $6m of net new ARR, the burn multiple is 2.0. Net new ARR is net of churn and downgrades, which is the whole point — it punishes growth that is leaking out the back.
   2. Why it beats the alternatives: growth rate alone rewards companies that buy revenue, and efficiency ratios based on a single quarter can be gamed by pausing spend. The burn multiple is one number that captures both sides at once.
   3. Rough bands, and these hardened after 2022: under 1 is exceptional, 1 to 1.5 is very good, 1.5 to 2 is acceptable at scale, 2 to 3 needs a specific explanation, above 3 is usually a broken go-to-market rather than an investment phase.
   4. It is stage-sensitive and you should say so. A company going from $1m to $3m of ARR will have an ugly multiple because the fixed cost base dominates. From $20m to $40m it is a genuine judgement on efficiency.
   5. What it hides: a company can produce a lovely burn multiple by starving R&D and harvesting an existing base. So I read it next to net revenue retention and the R&D share of spend — good multiple plus deteriorating NRR is a company eating its seed corn.
   6. In practice this is now the first number a growth investor asks for, because it is the cleanest available proxy for whether more capital produces more company.

   Where candidates lose it

   Using gross burn or using total ARR instead of net new ARR. Both make the number look better and both are wrong. And quoting benchmark bands without adjusting for stage — a seed company's burn multiple is nearly uninformative, and saying so is part of a correct answer.

   Expect next

   • What is the magic number and how does it differ from this?
   • How would you fix a burn multiple of 4?
   • What is a good burn multiple for a Series A company?
4. 021What is the SaaS magic number, and what does a reading of 0.5 tell you?Unit economics and cohortsIntermediatetechnicalGrowth equitySaaS-focused funds

   Say this

   Magic number is the annualised increase in quarterly recurring revenue divided by the prior quarter's sales and marketing spend. A reading of 0.5 says every dollar of sales and marketing bought fifty cents of annual recurring revenue, which implies a payback of about two years. That is a hold, not a spend signal.

   Then walk it

   1. Formula: (current quarter revenue minus prior quarter revenue) times four, divided by prior quarter sales and marketing expense. The times four annualises it, and the one-quarter lag reflects that spend converts with a delay.
   2. Reading it: above 1.0 means gross payback inside a year, so step on the accelerator. Between 0.75 and 1.0 is healthy. Below 0.75 means fix the funnel before adding budget. Below 0.5 usually means the segment or the channel is wrong.
   3. So 0.5 implies roughly 24 months to recover the acquisition cost on a gross-revenue basis, and longer on a gross-profit basis. At that level, raising more money to hire more reps makes the company worse, not bigger.
   4. What I would do about it rather than just diagnose it: split the number by segment and channel. Usually one motion is at 1.2 and another is at 0.2, and the blended 0.5 is hiding the fact that they should stop selling to the small accounts.
   5. The weaknesses, which you should volunteer: it uses revenue rather than gross profit, so it flatters low-margin businesses. It is noisy quarter to quarter for small companies. And it treats sales and marketing as a single lump when brand spend and quota-carrying rep cost have completely different lags.
   6. Which is why in practice I would look at it alongside CAC payback on a gross-profit basis and the burn multiple. Magic number is the quickest read; it is not the deepest one.

   Where candidates lose it

   Getting the formula slightly wrong — forgetting to annualise, or using the current quarter's sales and marketing spend instead of the prior quarter's. And treating the benchmark as a verdict rather than splitting it by segment, which is where the actual insight is.

   Expect next

   • How does that differ from the burn multiple?
   • What is a good magic number at Series B versus Series D?
   • If it is 0.4, what do you tell the CEO to do on Monday?
5. 023Walk me through a cohort analysis and tell me what you are actually looking for.Unit economics and cohortsIntermediatetechnicalEarly-stage VCGrowth equity

   Say this

   Group customers by the month they joined, then track each group forward over time. You are looking for three things: whether the curve flattens, whether later cohorts sit above earlier ones, and whether revenue per cohort grows after the curve flattens.

   Then walk it

   1. Build it as a triangle. Rows are join months, columns are months since joining, cells are the share of the cohort still active or the revenue they generate. Then read down the columns to compare cohorts and across the rows to see decay.
   2. First thing I look for: does the retention curve asymptote? A curve that flattens at 40 percent means you have a real product for 40 percent of the people you acquire. A curve that keeps sliding toward zero means you have a leaky bucket and paid acquisition is just filling a hole.
   3. Second: cohort quality over time. Later cohorts should retain better, because the product improved and targeting sharpened. If your newest cohorts are worse, either you are scaling into a lower-quality channel or the early cohorts were friends and design partners.
   4. Third, and this is where the money is: dollar retention within a flattened cohort. If month-24 revenue from a cohort exceeds month-1 revenue despite losing customers, the survivors are expanding and the business compounds without new sales.
   5. A concrete read: a consumer app at 25 percent D30 that flattens at 18 percent by month 6 is a real product. The same app sliding to 3 percent by month 6 is a paid-marketing treadmill regardless of how good the top-line growth chart looks.
   6. The two traps in the data itself: small recent cohorts look artificially good because they have not had time to churn, and a company that changed its pricing or its target segment mid-way has cohorts that are not comparable. Always ask what changed between cohorts.

   Where candidates lose it

   Describing the mechanics of building the table and never saying what a good one looks like. The whole value is in the three reads: flattening, cohort-over-cohort improvement, and dollar expansion. Also accepting aggregate retention — an aggregate number can look stable while every individual cohort is deteriorating, because new cohorts keep refilling it.

   Expect next

   • What does a flattening curve tell you that an aggregate churn number cannot?
   • What D30 retention would you want for a consumer app?
   • How would you spot a leaky bucket from the cohort table?
6. 024Give me the formulas for net revenue retention, gross retention and churn, and tell me which can exceed one hundred percent.Unit economics and cohortsIntermediatetechnicalGrowth equitySaaS-focused funds

   Say this

   All three measure the same cohort a year later. Gross retention counts only what you kept and is capped at 100 percent. Net retention adds expansion and can exceed 100. Churn is what you lost over what you started with. Neither retention figure includes revenue from new customers.

   Then walk it

   1. Gross revenue retention: starting ARR of a cohort, less churn and downgrades, divided by starting ARR. Expansion excluded, so it can never break 100 percent.
   2. Net revenue retention: starting ARR, less churn and downgrades, plus upsell and expansion, divided by starting ARR. Above 100 means the existing base grows on its own.
   3. Gross churn is one minus gross retention. Logo churn counts customers, not dollars, and the two diverge sharply — losing thirty small accounts and keeping two big ones can mean 30 percent logo churn and 95 percent dollar retention.
   4. Benchmarks worth knowing cold: best-in-class enterprise SaaS runs gross retention above 90 and net above 120. Mid-market sits around 85 and 105 to 110. SMB runs materially lower on both because small customers go out of business.
   5. Why it decides valuation: net retention above 115 percent means the business compounds without selling anything new, which is precisely what justifies a high revenue multiple. It is the single most predictive number in a software diligence.
   6. The manipulation to watch for: companies quoting net dollar retention on a subset — 'customers over $100k ACV' — which is always the best slice. Ask for it on the whole book, and ask whether it is calculated on a cohort or on a rolling trailing-twelve-month basis, because those give different answers.

   Where candidates lose it

   Mixing new-customer revenue into the retention calculation. It is a cohort metric and including new business flatters it badly. And not knowing which one can exceed 100 percent — that single detail reveals immediately whether you have ever actually built the number.

   Expect next

   • What does 140 percent net retention with 30 percent logo churn tell you?
   • Which matters more for valuation, growth or net retention?
   • How would you calculate net retention for a usage-based pricing model?
7. 027What metrics would you look at when valuing a retail company?Unit economics and cohortsIntermediatetechnicalSilver LakeTechnology, Media and Telecom · San Francisco · 2022

   Say this

   Same-store sales growth, gross margin, sales per square foot, inventory turns, and the payback on a new store. Retail is a unit-level business, so I would value the existing store base on cash flow and the growth story on how many more units can earn their cost of capital.

   Then walk it

   1. Same-store or like-for-like sales growth is the single most important number, because it strips out the flattering effect of opening stores. A chain with 30 percent revenue growth and minus 2 percent same-store sales is buying growth with capital.
   2. Unit economics of a new store: build-out cost, time to maturity, steady-state four-wall EBITDA, and therefore payback. Good specialty retail pays back in 18 to 30 months. Beyond that, expansion destroys value.
   3. Working capital and inventory. Inventory turns, weeks of cover, and the markdown rate. Retail failures are almost always inventory failures first — the P&L looks fine while the balance sheet fills with unsold stock that later gets discounted through gross margin.
   4. Cost structure: occupancy as a share of sales, because it is fixed and it is what kills you when traffic falls, and labour. Then the operating leverage question — how much can sales fall before four-wall EBITDA goes negative.
   5. For an omnichannel or e-commerce-heavy retailer, add CAC and repeat rate, contribution margin after delivery and returns, and the return rate itself, which in apparel can run 30 percent and quietly destroys the reported gross margin.
   6. Valuation itself: EV/EBITDA against peers, adjusted for lease obligations, since capitalised leases are debt in substance and post-IFRS 16 they sit on the balance sheet. And a sanity check on EV per store against replacement cost, which sets the floor.

   Where candidates lose it

   Valuing it like a software company on a revenue multiple, or quoting only same-store sales without the new-store payback. And forgetting leases — a retailer with $2bn of lease obligations and a headline low EV/EBITDA is not cheap, and in a tech-focused fund this is exactly the trap the question is set to catch.

   Expect next

   • How do you treat operating leases in enterprise value?
   • What is a good payback period on a new store?
   • How does the answer change for a pure e-commerce retailer?

   Reported by candidates at Silver Lake (Technology, Media and Telecom, San Francisco, 2022). Source: Wall Street Oasis.

8. 029How do the unit economics of a marketplace differ from a SaaS business?Unit economics and cohortsIntermediatetechnicalConsumer VCIndian venture capital

   Say this

   A marketplace has two customers and revenue is take rate on gross merchandise value, so the numbers to watch are contribution margin per transaction, liquidity, and repeat rate on both sides. SaaS has one customer and recurring contracted revenue, so retention and payback do most of the work.

   Then walk it

   1. Start with the revenue definition, because this is where founders obscure things: GMV is not revenue. Net revenue is take rate times GMV, and a company quoting a $500m GMV run rate on a 4 percent take rate is a $20m revenue business.
   2. Contribution margin per order is the core metric, and it has to be after all variable cost: payment processing, delivery, support, refunds, and any incentive or discount funded by the company. Indian food delivery and quick commerce both spent years with negative contribution margin per order while reporting GMV growth.
   3. Liquidity is the marketplace-specific concept with no SaaS equivalent: what share of listings transact, and how fast. It is the real measure of product-market fit, and it can look fine nationally while being broken in every individual city.
   4. So you analyse marketplaces city by city or category by category, never in aggregate. The question is whether the oldest, most mature city is profitable at the unit level, because that city is the only evidence of what the others become.
   5. Retention works differently on both sides. Supply-side churn is often the harder problem and is under-reported — a marketplace losing 60 percent of its sellers a year is permanently re-acquiring supply. And disintermediation matters: once buyer and seller know each other, do they transact off-platform?
   6. The genuine advantage over SaaS is capital intensity and network effects: no cost of goods in the classic model, and each side makes the other more valuable. The genuine disadvantage is that revenue is transactional, not contracted, so it can fall 40 percent in a quarter in a way software revenue cannot.

   Where candidates lose it

   Accepting GMV as the growth metric. Every marketplace deck leads with it because it is the biggest number available. Ask for net revenue and contribution margin per order in the oldest city, and know the word liquidity — that is the vocabulary check.

   Expect next

   • How would you calculate CAC for a two-sided marketplace?
   • What is disintermediation risk and how do you test for it?
   • Which side would you subsidise and for how long?
9. 030Walk me through the economic terms of a Series A term sheet.Term sheetsIntermediatetechnicalEarly-stage VC

   Say this

   Four economic terms do almost all the work: valuation and the amount raised, the liquidation preference, the option pool, and anti-dilution. Everything else in the economic section is either market-standard or a rounding error, and the control terms sit separately.

   Then walk it

   1. Valuation and amount. Pre-money valuation plus the new money equals post-money, and the investor's ownership is new money over post-money. Get straight which one is being quoted, because a $20m pre and a $20m post on a $5m cheque are 20 percent and 25 percent respectively.
   2. Liquidation preference. Standard is 1x non-participating: on an exit, the investor takes the greater of their money back or their pro-rata share of the equity. Anything above 1x, or participating, is structure and prices the deal differently from what the headline valuation suggests.
   3. The option pool. Usually 10 to 15 percent, set aside for future hires, and critically it comes out of the pre-money — so the founders fund it. This is the single most commonly misunderstood term on the sheet and it moves the effective price more than a valuation haggle usually does.
   4. Anti-dilution. Broad-based weighted average is market. Full ratchet is aggressive and rare outside distressed rounds. It only bites on a down round, which is exactly when it hurts most.
   5. Then pro rata rights, which are economically the most valuable thing an early investor gets: the right to keep your percentage in later rounds. In a power-law portfolio, the ability to put more money into the one winner is where a large share of fund returns actually comes from.
   6. And the control side, so you show you know the difference: board composition, protective provisions, drag-along, and information rights. Those are not economics, but a founder who trades a point of valuation for a lost board seat has made a much worse deal than they think.

   Where candidates lose it

   Listing terms without saying which ones matter. Interviewers want a hierarchy. And missing that the option pool comes out of the pre-money — get that wrong and your ownership maths is wrong, which is the whole reason the question gets asked.

   Expect next

   • Which of those terms would you give up to win a competitive deal?
   • What is the option pool shuffle?
   • What is the difference between 1x participating and 1x non-participating?
10. 031What is a liquidation preference, and why is 1x non-participating the norm?Term sheetsIntermediatetechnicalEarly-stage VCGrowth equity

    Say this

    It is the preferred shareholder's claim on exit proceeds ahead of common. One times non-participating means the investor chooses: take the money back, or convert and take their percentage. It is the norm because it protects downside without taxing the upside, which keeps the founders' incentives clean.

    Then walk it

    1. Mechanically, on a sale the preferred stack gets paid first up to the preference amount, and whatever is left goes to common. Non-participating means it is an either-or, not a both.
    2. Worked example. Invest $10m for 20 percent at a $50m post-money, 1x non-participating. Exit at $30m: take the preference, $10m, rather than 20 percent of $30m which is $6m. Exit at $200m: convert and take $40m. The crossover is at $50m, which is exactly the post-money.
    3. So the preference is a floor, and above the post-money valuation it is irrelevant. That is why it does not distort behaviour: in the outcomes venture actually cares about, the investor is just an equity holder.
    4. Participating preferred is different: the investor takes the $10m and then 20 percent of the remaining $190m. On a $200m exit that is $48m instead of $40m. It is called double dipping and it is standard in private equity, unusual in clean venture rounds.
    5. Why the market settled here: founders and employees hold common, and a heavy preference stack means the common is worth nothing in mid-sized outcomes, which destroys the incentive to sell for $80m rather than gamble. Investors learned that misaligned exits cost more than the preference earns.
    6. Where you still see more than 1x: down rounds, structured late-stage deals, and 2021-vintage crossover rounds where investors bought a high headline valuation and took 2x or 3x senior preference to protect themselves. Always ask for the full preference stack before you believe a valuation.

    Where candidates lose it

    Describing the preference and not running the arithmetic. The follow-up is always a numerical exit-waterfall question, so have the crossover logic ready: below the post-money take the preference, above it convert. And know that the preference stack, not the headline valuation, tells you what a late-stage round really cost.

    Expect next

    • Run me the waterfall on a $60m exit with $20m of 2x participating preferred.
    • What is a participation cap?
    • Is the preference stack senior or pari passu across rounds, and why does it matter?

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.