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. 012You have ten minutes with a founder and no deck. What do you ask?Market sizing and estimationHardsuperdayEarly-stage VCSeed funds

   Say this

   Five questions, each designed to be hard to rehearse. Why you, why now, what did you learn last month that you did not know before, what does your best cohort do, and what would have to be true for this to be worth ten billion dollars.

   Then walk it

   1. 'Why are you the person to build this?' Founder-market fit in their own words. I am listening for specific earned insight, not a career summary.
   2. 'Why is this possible now and not in 2019?' If there is no real answer, the company is probably a feature or a timing bet with no tailwind. This question kills more pitches than any other.
   3. 'What did you learn in the last month that changed your plan?' This is the highest-signal question I know, because it cannot be prepped and it reveals whether they are actually running experiments or just executing a deck.
   4. 'Show me your best cohort.' Not aggregate growth — one cohort, month by month. Retention curves do not lie and founders who know theirs by heart are usually the ones running the business off the data.
   5. 'What has to be true for this to be a ten-billion-dollar company?' I want to hear them reason about their own ceiling. Founders who have never thought about it are usually optimising for the next round, not the outcome.
   6. And I would spend at least two of the ten minutes shutting up. The questions matter less than whether they ask me anything sharp back, and whether they say 'I don't know' when they don't know.

   Where candidates lose it

   Reeling off fifteen diligence questions. Ten minutes means five questions and real listening. Also asking anything that a deck already answers — you learn nothing from 'what does the product do'. Pick questions that only the founder can answer.

   Expect next

   • Which of those five is most predictive, in your view?
   • What answer would make you pass immediately?
   • How do you avoid falling for a charismatic founder?
2. 025A company shows net revenue retention of 140 percent and logo churn of 30 percent. What is going on?Unit economics and cohortsHardtechnicalGrowth equitySaaS-focused funds

   Say this

   A small number of large accounts are expanding hard while a long tail of small accounts is falling out the bottom. The 140 is real but it is concentration, not health, and the business has two entirely different customer bases being reported as one.

   Then walk it

   1. Mechanically: if your top 10 percent of accounts double and your bottom 30 percent disappear, dollars grow while customer count shrinks. Both numbers are honest and together they describe a business that only works upmarket.
   2. The first thing I would ask for is the retention table split by initial contract size. I would expect something like 130 percent net retention above $100k ACV and 60 percent below $20k. That split is the actual finding.
   3. Why it matters: the company is spending sales and marketing to acquire small customers who leave, which drags the blended payback out. If they stopped selling to the bottom segment, revenue growth would slow and efficiency would jump sharply.
   4. The risk in the 140 is concentration. Ask what share of revenue the top ten accounts represent. If it is over 40 percent and the expansion is usage-based, one customer's budget cycle can flip the whole retention number negative.
   5. Also test whether the expansion is real adoption or a pricing artefact. A seat-based product growing with customer headcount compounds. Expansion driven by a one-time land-and-expand from a pilot to an enterprise licence does not repeat.
   6. The conclusion I would take to the partnership: this is probably a good enterprise business wearing a bad SMB business as a costume. The diligence question becomes whether they can kill the low end without breaking the growth story they have sold to previous investors.

   Where candidates lose it

   Reading the 140 as unambiguously good and stopping. Paired with 30 percent logo churn it is a signal about segment mix, not quality. The candidates who do well here immediately ask for the metrics split by cohort and contract size rather than commenting on the blended figures.

   Expect next

   • What would you tell them to do about the low end?
   • How much customer concentration would make you pass?
   • How do you tell adoption-driven expansion from a pricing artefact?
3. 032A fund invests twenty million dollars for thirty percent with a 2x participating preference. The company sells for sixty million. Who gets what?Term sheetsHardtechnicalGrowth equityLate-stage VC

   Say this

   The fund takes $46m and the common holders share $14m. The 2x preference pays $40m off the top, then participation gives the fund its 30 percent of the remaining $20m, which is another $6m. So a 2.3x for the fund, and the people who own 70 percent of the equity take under a quarter of the proceeds.

   Then walk it

   1. Step one, the preference: 2 times $20m is $40m, paid before common sees anything. Exit is $60m, so there is $20m left.
   2. Step two, participation: because it participates, the fund also takes its equity share of the residual. Thirty percent of $20m is $6m.
   3. So the fund takes $46m on a $20m investment, a 2.3x. Common — founders and employees — splits $14m, which on a $60m exit is 23 percent of the proceeds for people who own 70 percent of the equity.
   4. Now the check the interviewer wants: would the fund ever convert instead? Converting gives 30 percent of $60m, which is $18m. Far worse than $46m, so no. The preference dominates all the way up to the point where 30 percent of the exit exceeds $40m plus participation, which never happens with uncapped participation.
   5. That is the real insight to state: uncapped participating preferred means the investor always prefers the preference route, so the structure never converts and the common is permanently subordinated. This is why participation caps exist — typically at 2x or 3x of invested capital, after which the investor must convert.
   6. And the behavioural consequence, which is why founders fight this term: at a $60m exit the founding team gets very little, so they would rather roll the dice on a bigger outcome. Heavy structure creates exactly the misalignment that kills reasonable M&A.

   Where candidates lose it

   Fumbling the arithmetic under pressure, and forgetting to check the conversion alternative. Do it in two clean steps out loud — preference first, then participation on the residual — and always state the convert-versus-preference comparison, because that is the part that shows you understand the option rather than the formula.

   Expect next

   • At what exit value would the fund prefer to convert?
   • How would a 3x participation cap change the answer?
   • What does this structure do to the founders' incentive to sell?
4. 037A founder has raised four million dollars of SAFEs at caps of eight, twelve and twenty million, and now raises a twenty-five million dollar post-money Series A at eighty million. What happens?Term sheetsHardsuperdayEarly-stage VCSeed funds

   Say this

   All three tranches convert at their caps, which sit far below the round price, so they buy a much larger share than the founder expects. Roughly: the SAFEs take about 36 percent of the company before the round, the Series A takes 31 percent, and after conversion and a pool top-up the founders are left around a third rather than the sixty percent they assumed.

   Then walk it

   1. Work each tranche at its cap. Say $1.5m at an $8m cap, $1.5m at $12m, $1m at $20m. Treating each cap as a post-money valuation, that is roughly 18.75 percent, 12.5 percent and 5 percent of the pre-round company.
   2. That sums to about 36 percent of the company from $4m of money — before the Series A has put in a rupee. That number is the shock, and it is the point of the question.
   3. Then the Series A: $25m at $80m post-money is 31.25 percent, which dilutes everyone else by about 31 percent. So the SAFE holders land near 25 percent post-round and the founders plus pool share the remaining 44 percent.
   4. Take a 12 percent pool top-up out of the pre-money and the founders are down to roughly a third. A founder tracking only the headline caps would have assumed well over half. This is the standard SAFE-stacking accident.
   5. Note who bears the conversion dilution: with post-money SAFEs, the SAFE holders' percentages are struck after all SAFEs convert, so the cost of the cheap paper lands on the founders rather than being shared with the incoming Series A. Pre-money SAFEs shared it.
   6. Two second-order mechanics that matter in practice. If a most-favoured-nation clause sits in any of the SAFEs, that holder may take the best terms in the stack, making the $20m-cap holder convert at $8m. And the option pool top-up usually comes out of the pre-money too, which compounds it.
   7. What I would actually do as the incoming lead: build the full conversion waterfall before agreeing a price, quote my ownership on a fully converted, fully diluted basis including the new pool, and if the founders are left too thin, restructure — either more pool, a founder top-up grant, or renegotiating caps with the SAFE holders who all want the round to happen.

   Where candidates lose it

   Quoting your ownership off the headline post-money without converting the SAFEs first. Your 31 percent is not 31 percent once $4m of cheap paper lands. Every real term sheet is priced on a fully converted, fully diluted basis, and getting this wrong in an interview is the clearest possible signal you have never seen a cap table.

   Expect next

   • What if one of those SAFEs has an MFN clause?
   • How would you fix a cap table where the founders are down to 25 percent at Series A?
   • Would you rather the company had done a priced seed instead?
5. 039Which terms would you give up to win a competitive deal, and which would you never give up?Term sheetsHardsuperdayEarly-stage VCGrowth equity

   Say this

   I would give up price, protective provisions beyond the essentials, and the board seat before I gave up pro rata rights, standard 1x non-participating preference, founder vesting, and information rights. Price is recoverable in a power-law outcome; access to the winner's next round is not.

   Then walk it

   1. Give on price first, within reason. Paying 20 percent more on entry costs you 20 percent of your return; missing the company costs you 100 percent of it. In a portfolio where one investment produces most of the return, entry-price discipline on the best company is the most expensive discipline there is.
   2. Give on the board seat if you must, and take an observer seat instead. You lose formal control you were never going to exercise and you keep the information flow, which is what actually lets you help.
   3. Give on protective provisions beyond the core. Keep consent on issuing senior securities, on a sale, and on changing the size of the board. Let go of the long tail of consents that just slow the company down and make you the investor founders warn each other about.
   4. Never give pro rata. That is the one term whose value is highest in the outcome you care most about, and it is the cheapest for the founder to grant.
   5. Never give founder vesting, and never go above 1x non-participating or accept a structured preference just to justify a high price. Paying up with a clean structure is a decision; paying up with structure is pretending you did not pay up.
   6. And never give up on the diligence you would do anyway. Competitive processes are designed to compress your timeline, and 'we had 48 hours' is the most common explanation for a bad investment. If speed is the only way to win, that is information about the round.

   Where candidates lose it

   Answering as if every term is negotiable equally, or refusing to concede anything, which signals you have never been in a competitive process. Interviewers want a ranked trade-off with a reason attached to the ranking, and they want to hear that pro rata and clean structure sit on the non-negotiable side.

   Expect next

   • How much would you overpay for a company you really believed in?
   • How do you do diligence in 48 hours without cutting corners?
   • When is losing a deal the right outcome?
6. 042Build me a cap table from founding through Series B.Cap table and dilutionHardtechnicalEarly-stage VCGrowth equity

   Say this

   Work in percentages, round by round, and apply each round's dilution to everyone who came before. Two founders start at 100, a seed round takes 20, a Series A takes 22, a Series B takes 18, and the founders end up around 45 percent before you account for the option pool, or closer to 38 after it.

   Then walk it

   1. Founding: two founders, 50/50, 10 million shares, all common, four-year vesting with a one-year cliff.
   2. Seed: $3m at a $12m post-money, so 25 percent to the seed investor, plus a 10 percent pool established out of the pre-money. Founders go from 100 to about 65 percent between the two. The pool coming from the pre-money is why 100 minus 25 does not equal the founders' number.
   3. Series A: $12m at a $60m post-money, so 20 percent to the new investor, and a pool top-up to 12 percent. Everyone pre-existing is diluted by roughly 22 percent including the top-up, so the founders go from 65 to about 51.
   4. Series B: $30m at $170m post-money, 17.6 percent to the new lead, plus a small pool top-up. Founders land around 41 to 42 percent, and if the seed fund did not follow on it is down from 25 to about 16.
   5. The rule to say out loud, because it is the whole mechanic: each round's dilution applies multiplicatively to every prior holder. Three rounds at 20 percent each leaves you with 0.8 cubed, which is 51 percent, not 40. Candidates subtract when they should multiply.
   6. Then the two real-world complications I would flag. One, the pool top-up at each round comes out of the pre-money, so the founders fund the hires the new investor wants. Two, if there are SAFEs or notes outstanding, they convert first and they convert at their caps, so the Series A investor's own percentage is diluted by paper they did not price.

   Where candidates lose it

   Subtracting percentages instead of multiplying. Three 20 percent rounds do not take you to 40 percent. And forgetting the option pool at each round — it is typically 10 to 15 percent, it comes from the pre-money, and leaving it out makes the founders look 10 points richer than they are.

   Expect next

   • Where did the option pool come from in each round?
   • How much should the founders own at Series B for this to be fundable?
   • What happens to the seed investor if they do not follow on?
7. 054An oil company loses forty million dollars of market capitalisation because of litigation, then sells an asset to pay for it. Is the share price drop justified?Early-stage valuationHardsuperdaySilver LakeTechnology, Media and Telecom · San Francisco · 2022

   Say this

   A $40m drop is justified only if the expected after-tax cash cost of the litigation is about $40m and nothing else changed. The asset sale is a separate question: if the asset was sold at fair value, the sale itself destroys no value and the share price should not move again for it.

   Then walk it

   1. First, price the liability properly. What matters is the probability-weighted, after-tax, present value of the cash outflow, plus any legal costs, less insurance recovery. A $40m headline settlement at a 25 percent tax rate and 70 percent probability is closer to $21m of economic cost.
   2. Second, ask whether the litigation revealed something. If it signals an ongoing practice that will generate more claims, or a regulatory exposure across the asset base, the drop should exceed the direct cost — the market is repricing future cash flows, not just paying a fine. That is usually the real answer for litigation-driven drops.
   3. Third, the asset sale. Selling an asset at fair value is value-neutral: you swap an asset for cash of equal value. Enterprise value falls by the asset's value, cash rises, equity value is unchanged.
   4. But sold at a discount, which is what a forced seller does, it is value-destructive twice over — once for the discount and once for the loss of an asset that may have been worth more inside the portfolio than to the buyer. A distressed sale to fund a settlement is a classic way a $40m problem becomes a $60m one.
   5. Then the tax detail worth mentioning for an oil asset: a sale can trigger a large gain against a low tax basis, so the after-tax proceeds can be materially less than the headline price, and the company may need to sell more than $40m of assets to net $40m.
   6. So the structured answer is: justified if the drop equals the after-tax expected cost and the litigation is genuinely one-off. Understated if it signals a systemic problem. Overstated if the market priced the headline number rather than the probability-weighted after-tax figure, which markets frequently do on litigation news.

   Where candidates lose it

   Answering yes or no. This is a framework question and the only wrong answer is an unconditional one. The two things you must separate are the cost of the liability and the information content of the litigation, and you must state that a fair-value asset sale is value-neutral while a forced one is not.

   Expect next

   • What if the asset was sold at a 20 percent discount to fair value?
   • How would you price the litigation if the outcome is binary?
   • Does the asset sale change enterprise value or equity value?

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

8. 057How many investments should a hundred million dollar seed fund make, and how much do you reserve?Portfolio constructionHardtechnicalSeed fundsIndian venture capital

   Say this

   Roughly thirty to thirty-five companies with about half the fund reserved for follow-ons. So call it $45m of initial cheques averaging $1.4m for 10 to 15 percent ownership, $45m of reserves, and $10m for fees and expenses over the fund's life.

   Then walk it

   1. Start from the return requirement and work back. A $100m fund needs $300m gross to return 3x net-ish to LPs. If one company produces $200m of that, I need to own enough of it: a $2bn exit with 10 percent retained ownership gives $200m. So the entry ownership target has to survive dilution to 10 percent.
   2. That fixes ownership at entry around 12 to 15 percent, because three later rounds will roughly halve it unless I follow on. Ownership target, not cheque size, is the primary constraint.
   3. Then portfolio size. Too few names and you may simply not own an outlier; too many and you cannot own enough of each or spend time on them. Thirty to thirty-five is the conventional band for seed, and the maths behind it is that at roughly a 1-in-20 hit rate for a fund-returner you want at least twenty-five shots.
   4. Reserves: 50 percent is the standard split at seed and it is the single most consequential construction decision. A fund that deploys 80 percent into initial cheques gets crushed in the winners, because the Series B and C are where the ownership is defended.
   5. Fees drag, and you should mention it because it catches people out. A 2 percent management fee over ten years is roughly 20 percent of committed capital, though most funds step it down. So the investable capital out of $100m is $80m to $85m, not $100m, and every portfolio-construction number has to be built off the investable figure.
   6. The India-specific adjustment: at seed in India, cheque sizes of $1m to $3m buy meaningfully more ownership than the same cheque in the Bay Area, so the same $100m fund can run a slightly more concentrated book at higher ownership. The offsetting constraint is exit scale — fewer billion-dollar outcomes means the fund-returner has to come from a smaller pool of candidates.

   Where candidates lose it

   Giving a portfolio count with no arithmetic behind it. Build it from the fund-return requirement through ownership target to cheque size — that sequence is the answer. And forgetting the fee drag, which makes every construction number 15 to 20 percent tighter than the headline fund size suggests.

   Expect next

   • What if you could only make ten investments?
   • How would that change for a $500m multi-stage fund?
   • How do you decide which companies get the reserves?
9. 058When do you decide not to follow on?Portfolio constructionHardsuperdayEarly-stage VCSeed funds

   Say this

   When I would not make the investment cold at the new price. That is the only test, and applying it honestly is hard because I am anchored on my entry price and on not wanting to signal doubt. Sunk cost and signalling are the two forces pushing every follow-on decision the wrong way.

   Then walk it

   1. The discipline: re-underwrite the company from scratch at the new price as if a stranger brought it to me. If I would pass, I pass, and my existing position is irrelevant to that judgement.
   2. The specific triggers for not following. The team has changed in a way that removes the reason I invested. The market turned out to be structurally smaller than underwritten. The metrics are fine but the shape is wrong — growing revenue with deteriorating retention. Or the price now requires an exit outcome I do not believe in.
   3. The uncomfortable one: the company is doing fine and will probably return 2 to 3x, but it will never return the fund. In a power-law portfolio that capital is better spent defending the position in a potential outlier. Passing on a healthy company is the hardest call in the job and it is usually right.
   4. Signalling risk is real and you should address it rather than pretend it is not. If an existing investor does not participate, incoming investors read it as information, and it can genuinely make the round harder for the founder. So the decision has to be communicated early, directly to the founder, with a clear reason — never by going quiet.
   5. What I would do to make it cleaner: agree the reserve policy in advance at the portfolio level, so the decision is a framework being applied rather than a verdict on the company. And where I can, offer to introduce other investors, which is the honest version of support when I am not writing the cheque.
   6. One structural caveat: a fund at the end of its investment period with no dry powder has no choice, and everyone in the market knows it. That is a fund-construction failure showing up as a portfolio decision, which is exactly why reserves are set at the start.

   Where candidates lose it

   Answering only on the company's merits and ignoring signalling risk. It is the thing that makes this decision genuinely difficult, and interviewers want to hear you handle the founder conversation. Also failing to mention the hardest case — the perfectly decent company that cannot return the fund.

   Expect next

   • How do you have that conversation with the founder?
   • What is signalling risk from a multi-stage fund?
   • Would you ever follow on just to protect the signal?
10. 063You are on the board and the CEO wants to fire their co-founder. What do you do?Board and governanceHardsuperdayEarly-stage VCGrowth equity

    Say this

    Slow it down by two weeks, get the facts independently, then support a clean decision either way. My job is not to adjudicate the relationship — it is to make sure whichever way it goes, the company keeps functioning and the equity consequences are handled properly before anyone is told.

    Then walk it

    1. First, separate the question of whether the person should go from the question of how. The first is a performance judgement I should test; the second is where boards do the real damage by rushing.
    2. Get independent information. Talk to the co-founder directly, talk to two or three people who work with both of them, and understand whether this is a capability gap, a role that has outgrown the person, or a personal breakdown. Those three have different answers — the second is often solved by changing the role rather than removing the person.
    3. Then the equity question, before any conversation happens. What is vested, what accelerates, what does the shareholders' agreement say about a departing founder's shares, and is there a repurchase right. A founder leaving with 18 percent fully vested and no involvement is a problem every future investor will raise, and the time to negotiate it is before the termination, not after.
    4. Then the operational question: what does this person actually hold? Key customer relationships, the entire backend, the regulatory licence in their name. I have seen a co-founder removal take out a third of engineering because nobody mapped the dependency first.
    5. Then support the CEO if the case holds. A board that blocks a CEO's decision about their own leadership team, without a serious reason, has just told the CEO they are not in charge. But I would also say clearly that this is a signal about the CEO — how they handle it, whether they are generous, and whether they have been avoiding the conversation for a year.
    6. And be honest about the pattern: the modal error here is not firing too fast, it is a board that let a broken co-founder relationship run for eighteen months because nobody wanted the conversation. Speed in the decision, care in the execution.

    Where candidates lose it

    Taking sides immediately, in either direction. Backing the CEO reflexively ignores your duty to all shareholders and to the facts; blocking them undermines their authority. The structure is: pause, verify independently, sort the equity and dependency consequences first, then support a clean decision.

    Expect next

    • What if the departing founder has 20 percent fully vested?
    • What if you think the CEO is the problem, not the co-founder?
    • How do you handle the announcement to the team and to customers?

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.