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. 066How would you structure a bridge round for a portfolio company that is six months from running out of cash?Down rounds and secondariesHardsuperdayEarly-stage VCGrowth equity

   Say this

   First establish what the bridge is bridging to — a specific metric that makes the next round fundable, not just more time. Then size it to reach that milestone with three months of buffer, structure it as a convertible instrument inside the existing syndicate, and make the cut in costs a condition rather than a suggestion.

   Then walk it

   1. The diagnostic question first: is this a bridge or a pier? A bridge reaches a specific, credible milestone — $4m of ARR, a signed enterprise customer, a clinical result. A pier is money that buys time with no defined destination, and it is the most common way funds throw good capital after bad.
   2. Size it properly. Six months of runway is usually not enough to hit anything, so size to twelve to fifteen months including a cut, and be honest that a small bridge just brings you back to the same conversation with less credibility.
   3. Structure: typically a convertible note or SAFE that converts into the next priced round at a discount, often 15 to 25 percent, sometimes with a cap set near the last round. This avoids setting a new price at the worst possible moment, which is the main reason bridges are done as convertibles rather than priced rounds.
   4. Who funds it: the existing syndicate, pro rata. An inside round at a discount is normal. The decision is whether every existing investor participates — if one refuses, the others are effectively subsidising them, which is when pay-to-play or a senior preference for the bridge money gets negotiated.
   5. Conditions, and this is where the real work is. A cost reduction that extends the runway on its own, a revised plan the board signs off on, and usually a commitment about the fundraising process starting by a specific date. Bridge capital without operational conditions attached is a gift, not an investment.
   6. And the honest internal test: would I put this money into a new company at the implied price instead? If not, I should consider whether the right answer is a smaller bridge aimed at a sale of the company rather than at another round. Funding a managed exit is a legitimate and underused use of bridge capital.

   Where candidates lose it

   Structuring the instrument before establishing what the milestone is. The financial engineering is the easy part; the judgement is whether there is a credible destination. And never propose a bridge without a cost cut attached — every experienced investor will ask, and 'we didn't want to demoralise the team' is not an answer.

   Expect next

   • What if one existing investor refuses to participate?
   • When is the right answer to fund a sale instead of a bridge?
   • Would you set a cap on the bridge, and where?
2. 067Walk me through a down round and what it does to the cap table.Down rounds and secondariesHardtechnicalGrowth equityLate-stage VC

   Say this

   New money comes in at a lower price per share than the last round, so the dilution is severe, anti-dilution provisions fire and reprice earlier preferred, and the option pool is usually underwater so it has to be refreshed. The founders and employees absorb almost all of it.

   Then walk it

   1. Start with the raw dilution. A company that raised at $200m post now raising $30m at $80m post gives the new money 37.5 percent, so everyone else is diluted by well over a third in one round.
   2. Then anti-dilution fires. Earlier preferred with weighted-average protection gets a lower conversion price and therefore more shares, and that adjustment comes entirely out of the common. With a full ratchet anywhere in the stack, the effect is brutal — earlier investors can end up with multiples of their original share count.
   3. Then the option pool problem, which people forget. Employee options struck at the old, higher price are worthless, so retention has collapsed. The fix is a new pool at the new strike, sometimes plus a repricing or exchange of existing grants, and that is another 10 to 15 percent of dilution on top.
   4. Put it together and a founding team at 35 percent before a serious down round can be in the low teens after it, with the option pool refreshed and the preference stack still sitting above them. The practical consequence is that the equity no longer motivates anyone, which is why down rounds are followed by departures.
   5. So the conversation the board has to have is about restructuring, not just pricing: converting some of the old preference stack to common, cutting the aggregate preference back, and issuing meaningful new founder and management grants. A clean down round with a reset stack is far better than a high-priced round loaded with structure.
   6. And the signalling and legal points. A down round is a repricing of the story as well as the shares, so customers and candidates hear about it. And existing directors approving a round in which their own funds participate at a favourable price sit in an obvious conflict, which is why an independent committee or a fairness process matters more here than anywhere else.

   Where candidates lose it

   Only calculating the arithmetic dilution and stopping. The full answer has four layers: raw dilution, anti-dilution firing, the underwater option pool, and the resulting retention problem. Missing the option repricing is the most common gap, and it is the one that actually determines whether the company survives the round.

   Expect next

   • Would you rather do a clean down round or a flat round with 3x participating preferred?
   • How do you handle underwater employee options?
   • What is the conflict when existing investors lead the round?
3. 068Why is a structured round often worse for a company than a clean down round?Down rounds and secondariesHardsuperdayLate-stage VCGrowth equity

   Say this

   Because it preserves the headline valuation by burying the real price in terms nobody outside the deal can see. The company looks like it raised flat, but a 2x senior participating preference with a full ratchet means the common is worth far less than in an honest down round at a lower price.

   Then walk it

   1. What structure means in practice: multiple liquidation preference, participation, senior rather than pari passu ranking, full ratchet anti-dilution, guaranteed IPO returns or ratchets on the IPO price. Each one transfers value from common to the new preferred without touching the headline number.
   2. Run it. A flat $500m round with $150m of new money at 2x senior participating means the first $300m of any exit goes to the new investor before anyone else sees a rupee. At a $400m exit, the common gets almost nothing — worse than if the round had simply priced at $200m with clean terms.
   3. The second cost is compounding: structure is senior and it stacks. The next investor demands terms at least as good, so you get a tower of preferences, and by the third round the common is a call option struck impossibly high. Employees work out that their options are worthless well before the board admits it.
   4. The third cost is optionality on exit. A heavy preference stack means a $300m sale pays management nothing, so the team will not sell, so the company keeps raising. Structure removes the reasonable exits and forces an all-or-nothing outcome.
   5. The clean alternative: reset the price, take the dilution, refresh the option pool, and keep the stack at 1x non-participating. Everyone knows where they stand, the recruiting story is honest, and a mid-sized exit still pays the team.
   6. This was the defining mistake of the 2021 to 2022 period. A lot of companies protected a unicorn headline with structure and discovered two years later that the structure, not the valuation, was what made them unfinanceable and unsellable. Being able to say that with a specific example is what makes this answer land.

   Where candidates lose it

   Treating a flat round as good news. Any time a valuation holds in a bad market, the first question is what the terms were. A candidate who does not ask for the preference stack before commenting on a valuation has not understood how late-stage rounds are actually priced.

   Expect next

   • What is an IPO ratchet and who does it hurt?
   • How would you find out whether a reported valuation was structured?
   • As the founder, which would you choose and why?

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.