How ready are you for a venture capital interview?

Answer: The GP typically commits 1–5% of the fund itself and earns carry on gains above the return of capital

The GP commitment, usually a low single-digit percentage of the fund, is what puts the partners' own money at risk alongside the LPs. Beyond the fee, the GP earns carry on gains. Venture carry is structurally slower than buyout carry because it depends on exits that take a decade, which is the single most important thing a junior candidate misunderstands about the economics.

Answer: It has no fixed life or fundraising cycle, so it can hold positions indefinitely and does not have to return capital on a set schedule

An evergreen or permanent-capital vehicle has no ten-year clock. That removes the pressure to exit on a schedule and lets the fund keep compounding a winner, but it also changes how the team is paid and how LPs get liquidity. Picus Capital is the best-known European example, and 'why evergreen' is a standing interview question there.

Answer: Capital set aside to keep investing in the existing winners at later rounds, protecting ownership against dilution

Reserves are usually the larger half of a venture fund. A seed fund that deploys everything into first cheques gets diluted out of its best company by the Series C. How a fund reserves, and how disciplined it is about following its losers rather than its winners, is one of the sharpest questions a candidate can ask an interviewer.

Answer: Returns follow a power law: most positions return little or nothing, so fund-level performance depends on the extreme tail

This is the defining fact of the asset class. A buyout fund can build a good return from many merely decent deals; a venture fund cannot. It shapes everything downstream, including why a venture investor asks 'could this be enormous' rather than 'is this likely to work', and why a candidate who pitches a safe, modest business in an interview has answered the wrong question.

Answer: The percentage of a company a fund aims to hold, which given the power law determines how much a single winner can return

If one company has to return the whole fund, the arithmetic only works at sufficient ownership. That target is what sets cheque size, which in turn sets which rounds the fund can lead. A candidate who understands this can explain why a fund passes on a company it likes: the round is priced so the fund cannot get enough of it.

Answer: Cheque size, ownership target and reserve strategy, which together determine which rounds each can lead and how they behave in a follow-on

The difference is structural, not just size. A multi-stage fund can keep writing cheques into a winner from seed to growth; a seed fund must decide whether to spend scarce reserves or accept dilution. That also creates the signalling problem a founder worries about when a multi-stage investor declines to follow on.

Answer: Whether you can form and defend a view under uncertainty, and say what would change your mind

The deck review is the venture equivalent of a modelling test, and the answer being graded is not the verdict. Interviewers are watching whether you identify the one or two things that actually determine the outcome, take a position, and state the evidence that would move you. A candidate who lists ten balanced considerations and declines to conclude has failed it.

Answer: It names the central risk plainly and argues why the opportunity survives it, rather than burying the risk in a list

A memo that hides its weakest point is worthless to the person reading it, because that person will find it anyway. The strongest memos state the thing that could kill the investment in the first paragraph and then make the case regardless. That is also why a take-home memo is such an efficient filter: it is very hard to fake judgement in writing.

Answer: A bottom-up build from units and price, with the assumptions stated so they can be challenged

Top-down sizing from a published total addressable market is the classic mistake, because it is unfalsifiable and every founder does it. Building from customers, frequency and price makes your assumptions visible, which is the point: the interviewer wants to challenge one and see whether you update or defend.

Answer: 20%, because post-money is 25 and 5 divided by 25

Ownership is always against post-money: pre-money plus the new capital, so 5 of 25 is 20%. The trap in the real version of this question is the option pool, which is usually created out of the pre-money and therefore dilutes the founders rather than the incoming investor. Getting the direction of that dilution wrong is a common and very visible error.

Answer: The investor takes the greater of their money back or their pro-rata share, but not both

Non-participating means the investor chooses: take the preference, or convert and take the percentage. Participating means take both, which is far more aggressive and is where a headline valuation can quietly become a bad deal for founders. Being able to explain who gets what at a disappointing exit is the most practical term-sheet knowledge a junior candidate can have.

Answer: A specific view on the fund's thesis, stage and portfolio, ideally including a company you would have argued against

Every candidate has read the website, so restating it signals nothing. Naming a portfolio company and explaining the argument against it proves you have actually formed views, and it gives the interviewer something to disagree with, which is the conversation they wanted. It is also the one preparation step no incumbent guide tells candidates to take.

Answer: Teams are small and hire one or two juniors irregularly, so there is no volume to coordinate and headhunters have little to organise

Buyout on-cycle exists because large funds hire predictable cohorts and headhunters can coordinate them. A venture fund with fifteen investors hiring one analyst has nothing to coordinate. The practical consequence is that seats appear irregularly, are often filled from the fund's network before any posting exists, and the candidates who get them were already visible.

Answer: A paid fixed-term seat, typically five to twelve months, run on a dated annual cycle by several European funds, and one of the few genuinely open doors

It is the most reliable entry point in European venture and the one candidates most often miss, because the deadlines are published once and rarely repeated. Several funds run them on a fixed annual cycle. Knowing which funds run one, and when the window opens, is worth more than any amount of general preparation.

Answer: Sourcing: finding, contacting and qualifying companies before anyone else does

Sourcing is the job, and candidates who imagine the role is mostly judgement are surprised. It is why 'name a company you would invest in' appears in almost every venture application, often as the whole first filter: it is a direct test of whether you already do the job unpaid.

Answer: It vests over years and only pays after the fund returns capital, which in venture takes a decade or more, so a junior who leaves before then realises nothing

The mechanism matters more than the percentage. A junior on a small carry allocation in a fund that will not distribute for eight years is being offered something with a real but heavily discounted value. Understanding the timing, not just the number, is what separates an informed conversation about an offer from an impressed one.

Answer: Generally lower, because fee income scales with fund size and venture funds are usually much smaller

Cash comp comes out of the management fee, and a fee on a few hundred million supports a much smaller pot than a fee on many billions. Reliable per-level figures are scarce in venture, and most public numbers are self-reported estimates rather than disclosed pay, which is itself worth knowing before quoting one in an interview.

Answer: Partnership economics are finite and teams are small, so promotion depends on someone leaving or the fund growing, not on performance alone

Carry is a fixed pie split among partners, so adding one dilutes the rest. That is why many venture juniors are hired into explicitly fixed-term seats and why the honest question in an offer conversation is what happened to the last three people who held the role.