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. 040Explain drag-along and tag-along rights, and who each one protects.Term sheetsIntermediatetechnicalGrowth equityIndian venture capital

   Say this

   Drag-along lets a defined majority force everyone else to sell on the same terms, which protects the deal from being blocked by a small holdout. Tag-along lets a minority join a sale a larger holder has negotiated, which protects them from being left behind in a company controlled by a new owner.

   Then walk it

   1. Drag-along: if holders of, say, a majority of preferred plus the board approve a sale, all other shareholders must sell. Without it, an acquirer who needs 100 percent of the shares can be held hostage by a former employee with 0.3 percent.
   2. The negotiation on drag is the threshold and the carve-outs. Founders push for a high threshold and a minimum price, so they cannot be dragged into a cheap sale that pays the preference and leaves common with nothing. That protection is reasonable and usually granted.
   3. Tag-along, sometimes co-sale: if a major shareholder sells, minority holders can participate pro rata on the same terms. It stops the founder or a large fund quietly selling control while leaving small holders as minorities under a stranger.
   4. So the asymmetry is simple: drag protects the majority's ability to transact, tag protects the minority's ability to exit. Most term sheets contain both, aimed at different risks.
   5. In practice the term that gets used far more often is drag, and the moment it matters is a mediocre exit. A $70m sale with a $60m preference stack means the common gets almost nothing, and the only reason it closes at all is that drag prevents the founders from refusing.
   6. One India-specific note: Indian shareholders' agreements carry both, and enforceability against a non-signatory has been litigated, so the articles of association have to reflect the SHA. A drag right that exists only in the SHA and not in the articles is a much weaker right, and that is a standard diligence check on an Indian cap table.

   Where candidates lose it

   Getting them the wrong way round, which happens constantly under pressure. Anchor it: drag drags you along, tag lets you tag along. And know why founders negotiate a minimum price into the drag, because that is the point where the term stops being boilerplate and starts deciding whether anyone on the team gets paid.

   Expect next

   • What threshold would you want on a drag-along?
   • Why would a founder want a minimum price in the drag?
   • What is a right of first refusal and how does it interact with these?
2. 041Which protective provisions do you actually need, and which are just friction?Term sheetsHardtechnicalGrowth equity

   Say this

   You need consent on anything that changes the value of your security or takes the company out from under you: a sale, issuing a senior security, changing the preferred terms, taking on material debt, and changing the size of the board. Almost everything else is friction that makes you a slow investor and costs you deals.

   Then walk it

   1. The genuinely necessary five: sale or liquidation of the company, amendment of the preferred rights, authorising a security senior or pari passu to yours, incurring debt above a threshold, and changing the board's size or composition.
   2. Why those five and not others: each one either strips your economics directly or changes who controls the outcome. A new senior preference above you can render your preference worthless, and no amount of information rights protects against it.
   3. The friction list: consent on individual hires, on annual budgets, on any capital expenditure over a low threshold, on entering new markets, on all related-party transactions regardless of size. Each one sounds prudent and collectively they mean the CEO is running the company through a committee.
   4. The cost of over-asking is real and it is not just relational. A long consent list means every subsequent financing requires you to sign, which gives you leverage you did not pay for and which later investors will make you give up anyway.
   5. Set thresholds rather than absolutes. Debt above $2m needs consent; a working capital facility does not. Related-party transactions above a de minimis amount need consent; reimbursing the founder's laptop does not. Thresholds are how you get protection without becoming an obstacle.
   6. And be clear about what protective provisions are not: they are veto rights, not direction rights. They let you stop something, never start it. If you want the company to do something, that is board influence and relationship, and no term sheet gives it to you.

   Where candidates lose it

   Asking for everything because it is in the template. The sophisticated answer names a short necessary list, explains the mechanism each one protects against, and says out loud that a long list costs you deals and makes you the investor founders route around. And distinguish veto from direction — candidates routinely describe protective provisions as if they let the investor run the company.

   Expect next

   • What is the difference between a protective provision and a board seat?
   • What debt threshold would you set for a Series A company?
   • Which of these would a later investor make you give up?

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.