Venture Capital Firms Nominate Their Favorite Interview Questions

February 25, 2015

Venture capital firms build teams with some of the smartest talent out there — individuals who have built companies, graduated at the top of their class from top universities, and can navigate ambiguity and pinpoint billion-dollar opportunities.

“Venture capital is an incredibly multi-disciplinary job,” says Carlie Smith, talent manager at OpenView Venture Partners. “You need to have research skills to understand markets and develop theses, you need to be analytical enough to understand operating metrics, and be persuasive enough to win a deal.”

Smith points out that in junior or mid-level roles, VC firms must often look for competencies and traits that are indicators for future successes, since candidates don’t yet have the experience to check the ‘boxes’ of what VC firms need.

VC firms are often looking for candidates who are unicorns, which is why it’s crucial for them to ask the right questions. So, we asked recruiters and hiring managers from several firms to nominate their favorite interview questions. Here are five of their favorites:

1."If you had to pick a sector to explore that would fit within our investment strategy, what would it be?"

Tip nominated by: Carlie Smith, Talent Manager at OpenView Venture Partners.

When Smith asks this question, she isn’t looking for a ‘right’ answer. Instead, she’s looking into a candidate’s learning abilities and reasoning skills.

“I want to know that they are really thinking about themselves in the particular role at OpenView, and get a feel for how they are thinking about the market, a particular vertical, and even more specifically, particular companies,” says Smith.

She’s looking for an understanding of OpenView’s approach, hunger for information, and creativity.

“There are obvious ways of getting information, like reading reports, but beyond that, I want to see who the candidate would talk to. Would they think to seek out market experts or relevant companies? I’m wondering how far his or her approach will go.”

2."What’s your opinion on investment X?"

Tip nominated by: Phil Sanderson, managing partner at IDG Ventures.

Sanderson asks all candidates to share an ‘on-the-spot’ analysis of an investment that his team is currently evaluating. His goal is to simulate existing discussions that he has with his partners.

“It demonstrates how we will work together,” says Sanderson. “It also gives me insights into issues I may not be seeing and helps me evaluate the opportunity.”

He typically looks for answers that speak to the main issues involved with an investment decision, such as whether the market is big enough for a service or whether there’s evidence that consumers will pay an amount, given competitive offerings.

“There are always many issues to evaluate, but the ability for a candidate to speak to the most important ones on the spot helps me to identify if she or he has the right instincts to be a successful venture capitalist.”

3. "Do you collect things?"

Tip nominated by: Gene Yoon, managing partner at Bregal Sagemount.

Team members at VC firms need to be extremely patient. That’s why  Yoon asks all candidates to talk through their approaches to collecting.

“This helps me uncover if the candidate likes the he searching and hunting aspect of the job, which is important in finding deals in private equity,” says Yoon. “It also helps me see if they are patient enough to find exactly what they’re seeking out — an extremely important skill for evaluating deals.”

VC is a field build on long-term, strategic decision making, rather than quick wins. This question provides transparency into the candidate’s emotional intelligence and dedication to the long-haul.

4."Give me an example of 1-2 times in your life when you failed. What did you do about it?"

Tip nominated by: Ron Heinz, managing director at Signal Peak Ventures

At some point, everyone will make a mistake. As Heinz points out, it is important to know how they handle failure and

“It is crucial to me that the answer is readily available and genuine,” says Heinz.  “I also look to see how they process the answer and did they recognize a pattern and learn from it.”

In addition to looking for a genuine answer, Heinz looks for efficiency and thoughtfulness.

“I am always looking for the efficiency in how they answers the questions - once again, that shows me they realized, processed the mistake and provide a solution that showed they learned from it,” says Heinz.

5."Describe the last major conflict you had with your boss. How did you handle it?"

Tip nominated by: Brandon Tidwell, managing director at Signal Peak Ventures

In the VC world there, will come a time when a conflict arises and it is cruscial to know how a person will handle it. Tidwell asks this question to understand the candidate’s self-awareness.

“We are usually hiring more senior level people, so I look to see if the person understands that collaboration and leadership are a two way street,” says Tidwell. “I need to see giving and taking in the answer - you have to be strong enough to put your ideas forward while being tactful in your approach.”

Tidwell looks for opinionated people with strong collaborative instincts.

“You must be able to advocate while be collaborative and avoiding dysfunction,” says Tidwell. “I want to hire people that can manage conflict in a constructive way.”

Final thoughts

When you’re recruiting for smart people, you need to ask them even smarter questions. These five, while nominated by VCs, can apply to any industry and job description. Never look for a ‘right’ answer — seek out thoughtfulness instead.

*Image by Tax Credits

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