How do you answer the question why venture capital?
Q: Why venture capital? A: Because you are passionate about working with startups, helping them grow, and finding promising new companies – and you prefer that to starting your own company or executing deals.
A career in venture capital can be both challenging and rewarding. On the one hand, VCs have the opportunity to work with some of the most innovative and talented entrepreneurs in the world. They also can make significant financial returns if their investments are successful.
Venture capital definition
Venture capital (VC) is generally used to support startups and other businesses with the potential for substantial and rapid growth. VC firms raise money from limited partners (LPs) to invest in promising startups or even larger venture funds.
Interviews for Venture Capital are multi-faceted, testing your business and financial skills as well as your “fit” with a company. To succeed in a VC interview, it is important to not only demonstrate excellent technical skills and strong business intuition but to also exude a passion for early-stage investing.
The most important things to remember are that you should be able to clearly articulate why you want to join the VC industry overall and the firm in particular, and have knowledge of the markets and industries in which the firm works.
VC firms control a pool of various investors' money, unlike angel investors, who use their own money. VCs are willing to risk investing in such companies because they can earn a massive return on their investments if they are successful.
Work and Culture: Private equity is closer to the work and culture of investment banking, with long hours, a lot of coordination to get deals done, and significant technical analysis in Excel. Venture capital is more qualitative and involves more meetings/networking, and the hours and work environment are more relaxed.
Quite simply, management is by far the most important factor that smart investors take into consideration. VCs invest in a management team and its ability to execute on the business plan, first and foremost.
The first thing you should do when answering “why should we hire you?” is to highlight any skills and professional experience that are relevant to the position you're applying for. To make your answer all the more valid, make sure to always back up everything you say with examples, experiences, and achievements.
I believe that working in your organization would provide me with the opportunity to combine my professional expertise with my passion for making a difference. I am eager to contribute to your company's mission and be part of a team that shares my values and is committed to creating a better future.
What is venture capital in one sentence?
Venture capital is capital that is invested in projects that have a high risk of failure, but that will bring large profits if they are successful. Successful venture capital investment is a lot harder than it sometimes looks.
Venture capital funding is particularly helpful in the early stages of development when a startup is looking to scale rapidly. Unlike small business loans, venture capital does not require immediate repayment, allowing entrepreneurs to focus on growth without the burden of debt.
Venture capital firms seek employees with proven expertise, often in a particular industry in which the firm focuses. You should not only showcase your knowledge of the overall developments and trends in the industry, but also elaborate on the specific influences currently affecting the market.
Still, working in VC remains the dream for some. Many try, and many fail. It can take over a year to find a VC job, even if you have good banking experience, says the ex-Goldman associate.
VCs will want to know what milestones — particularly those related to growth and revenue — you will hit and when. If your startup has no immediate plan for revenue, say, because product development will take time, you should be ready to list other benchmarks you will achieve in lieu of revenue.
If your company is early stage and has a valuation under $1M, don't ask for a $5M investment. The investor would be buying your company five times over, and he doesn't want it. If your valuation is around $1M, you can validly ask for $200K–$300K, and offer 20–30% of your company in exchange.
Venture Capital is a “power law” business. In other words a business of successful outliers. The general rule of thumb is that one-third of a VC firm's portfolio will go to zero, one-third will break even or lose a little, and one-third will generate all the returns.
VCs often use the shorthand phrase "two and twenty" to refer to the 2% of annual management fees a venture fund might take and the 20% carried interest (or "performance fee") it would charge.
Create a tailored investment plan. Invest at the right level of risk. Manage your plan.
Here's how to best answer “tell me about yourself”:
Introduce yourself, tell them who you are and what you do. Then, talk about your past work experience, key responsibilities, and skills. Mention your relevant achievements. Finally, explain how your strengths can contribute to the company.
What is a weakness you have?
Examples of weaknesses you might want to cite during your interview include: Getting caught up in details. Unable to let go of projects. Trouble saying “no” to others. Managing missed deadlines.
Be specific about the skills you have that make you a great fit for the role. Pick specific skill-related keywords from the job description and use them in your answer. Try to find overlaps between the job requirements and your previous work experience to highlight that you have done similar work before.
“I'm driven primarily by my desire to learn new things—big or small—and take on new responsibilities so that I'm constantly growing as an employee and contributing more to my team and organization.
Talk about specific examples of how you can help this company achieve their goals and highlight any relevant transferrable skills that will make you stand out as the right candidate. Write down any recent achievements you can talk about or any challenges you've faced recently that might be related to this new job.
Venture capital (VC) is a form of private equity funding that is generally provided to start-ups and companies at the nascent stage. VC is often offered to firms that show significant growth potential and revenue creation, thus generating potential high returns.
