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. 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?
2. 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?
3. 050How do you value a pre-revenue company?Early-stage valuationIntermediatetechnicalEarly-stage VCSeed funds

   Say this

   Backwards from the exit, not forwards from the fundamentals. Pick a plausible exit value and multiple, work out the ownership you need at exit to make the return your fund requires, gross that up for future dilution, and that tells you the entry price you can pay.

   Then walk it

   1. This is the venture method. Say a plausible exit is $500m in eight years. My fund needs this position to return $100m, so I need 20 percent at exit.
   2. Gross up for dilution. Three more rounds at 20 percent each means my position shrinks by a factor of about 0.51, so I need roughly 39 percent today to hold 20 percent at exit — or I need pro rata rights and reserves to defend it, which is usually the more realistic path.
   3. If 39 percent is unbuyable, which it normally is, then either the exit assumption is too small for the cheque size, or I write a smaller cheque, or I pass. That is a useful, disciplined conclusion and it is what the method is for.
   4. Cross-check against three market anchors: what comparable rounds at this stage and geography are clearing at this quarter, the last round price if there was one, and replacement cost — what it would cost to build this team and product from scratch, which sets a rough floor for an acquihire.
   5. Then the qualitative adjustments that actually move seed prices: team pedigree, competitive tension in the round, and whether a brand-name fund is circling. A seed round with two term sheets prices 40 percent higher than the same company with one, and pretending otherwise is dishonest about how the market works.
   6. And say the limitation plainly: this produces a range, not a number, and the range is wide. The honest version is that seed valuation is a negotiation anchored on round size and convention, and the venture method is a discipline for knowing when to walk away rather than a pricing model.

   Where candidates lose it

   Reaching for a DCF. With no revenue, a DCF is a terminal value with a decorative forecast in front of it. And building the venture method without grossing up for future dilution — that step is what makes the answer usable, and skipping it is the most common error.

   Expect next

   • How much dilution would you assume between now and exit?
   • How does the answer change for a deep tech company with a ten-year horizon?
   • What if a competitor is bidding and the price is 50 percent higher?
4. 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.

5. 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?
6. 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?
7. 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?
8. 065In diligence you find that a founder overstated revenue. What do you do?Board and governanceHardsuperdayGrowth equity

   Say this

   Establish whether it was a definitional error or a deliberate misstatement, in that order, because they lead to completely different outcomes. A founder counting signed letters of intent as ARR is a founder who needs better accounting. A founder who knowingly gave me a number they knew was false is a pass, regardless of how good the company is.

   Then walk it

   1. First, go back to the primary data. Pull the bank statements, the invoices, the contracts and the accounting system, and rebuild the revenue figure myself. Do not go to the founder with an accusation built on a spreadsheet inconsistency.
   2. Then classify it. Definitional: counting bookings as revenue, annualising a one-month pilot, including a non-binding LOI, or recognising a multi-year contract upfront. All of these are common, mostly honest, and mostly fixable with a CFO.
   3. Deliberate: a number the founder knew was wrong, presented to raise money. That is a character finding and it is disqualifying. The reason is not moralism — it is that I am buying an illiquid position for eight years in a company where the only source of information is this person's word.
   4. Ask the question directly and watch the response. The good outcome sounds like 'you're right, we've been counting it as bookings and I should have flagged it'. The bad outcome is a moving explanation, or blaming the analyst, or a number that changes again when pressed.
   5. Then check whether it is systemic. If revenue was overstated, look at retention, pipeline and headcount too. One inflated metric is rarely alone, and a pattern converts a definitional problem into a deliberate one.
   6. And the obligation to others: if I pass on a character finding, I would tell my own partnership plainly why. Whether to tell other investors is genuinely harder — there is defamation risk and I would take legal advice — but I would not give a positive reference, and I would say nothing rather than something misleading.

   Where candidates lose it

   Jumping straight to 'I'd walk away'. It sounds principled and it shows no judgement, because most revenue discrepancies at seed and Series A are definitional. The structure is: verify from primary documents, classify honest versus deliberate, test with a direct question, then act. Only the deliberate case is an automatic pass.

   Expect next

   • Where is the line between aggressive and dishonest?
   • Would you tell other investors?
   • What if you had already signed the term sheet?
9. 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?
10. 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?

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.