Private equity firms look for analysts who have M&A and LBO deal experience. They are, after all, in the business of buying companies. So your capital markets or IPO experience isn’t as important to them.
To prepare both your resume and for the interview, you’ll need to make a list of all the deals you’ve worked on and carefully decide which ones to feature, and why they mattered. Go back and review the details of these deals so they’re fresh in your mind.
It’s best to pick unusual deals or ones in which you contributed something significant, or learned something significant. LBO deals are a good choice because you can describe why the deal worked and demonstrate your knowledge of the process.
When talking about a deal, give a brief overview of the company, industry and major deal points, and then describe what was significant about that deal.
In addition, do your homework and be prepared to talk about portfolio of the firm you’re interviewing with. Spend time researching the firm’s major competitors. Ask a few pointed questions. Asking about things such as their business model, revenue model or other strategic questions about a portfolio company is also good way to show you understand their business.
If you don’t have any M&A or LBO deal experience, then you need to find projects that demonstrate similar skills, such as work that improves the
operation of a company, due diligence or in-depth equity research.
You can get more details about finding private equity jobs and nailing the interview by reading Job Search Digest’s Private Equity & Venture Capital Careers Guide.
If you think getting a job at Google is tough, try surviving the interview process at a top private equity firm. One banking analyst who went through the process at megafirms KKR (Kohlberg Kravis & Roberts) and TPG (Texas Pacific Group), says compared to those interviews, a Google job interview is a walk in the park.
According to an article by Business Insider’s online blog, Clusterstock, the typical interviewee is plunked down at a desk and given two hours to write out all the steps necessary for a leveraged buy-out. Or told to select a company he or she thinks the firm should choose for an LBO or IPO, and how and exactly why they should do it.
That’s the easy part. Once finished with the writing, you’re walked into a room full of senior executives as asked to present each step of the process and justify every word in front of the group. If you get past this grilling, the prize is another interview with someone else. You’re even handed a rigid minute-by-minute schedule for the whole day. Screw up the time spent on any section, and you’re toast.
Of course, if you have some time on your hands and want to bone up for your next private equity job interview with a few easy questions, you can always check out 15 Google Interview Questions That Will Make You Feel Stupid.
If your Venture capital resume was good enough to land you an interview, these questions should be helpful in landing the offer.
Q: How would you evaluate a possible portfolio company and their business plan?
You have to emphasize your ability to look beyond the numbers and read between the lines. Evaluating financial facts is much different than forecasting revenue potential. In an early stage investment, two things will make the difference between success and failure: seasoned management and sales potential. Understanding how to effectively evaluate the leadership and reality of the market demand is crucial. The key to any venture capital investment is the future prospects of the market.
This understanding should be central in your response to this question. You should tailor your answer to showcase how your experience and successes have developed your ability to project demand and forecast sales. If you have accomplishments where you developed a nascent concept into a market success, make sure to discuss how those experiences lend well to a venture capital career.
Q: Tell me about your most challenging professional experience.
This is a great opportunity to make a lasting impression – take advantage of it. Remember that you would not be where you are at this moment, if you didn’t have the experience that makes this VC firm interested in you.
Choose an experience from your resume that showcases exactly how your skills help you overcome obstacles and challenges that would arise in a venture capital career. If you were involved with a start-up organization that floundered, use that experience to showcase how your leadership turned around the situation or explain the lessons learned from that experience. Remember, we tend to learn more from our mistakes than our successes. Discuss how your company released a product or service that did not perform well in initial market testing – and how you utilized that information to create alternative uses or features that drove an eventual success.
Q: What industries are of greatest interest to you?
The response to this question should be tailored to the individual firm you are interviewing. Venture capital firms tend to be highly specialized, and your answer must reflect that specialization. With your hours of preparation and research prior to your interview, specific answers should come easy to you. One of the ways to distinguish yourself would be to propose complementary and new, but related, niches to the firm. The company may disagree with your suggestions. However, if you can provide compelling reasons for your proposals, you will have demonstrated industry insight and creativity that will go a long way in impressing your interviewer.
Q: What have you personally invested in?
Venture capitalists make a living putting their “money where their mouth is,” and they expect that you should too. Taking calculated risks for the long-term reward is an important characteristic to demonstrate. Whereas your personal portfolio may not contain equity in burgeoning start-up ventures, you can always show that your brokerage account shines with the industry’s best and brightest – and how you placed them into your stock portfolio long before the general investing public got caught up in the hype.
You are aiming for an industry focused on startups and adding value to early stage development companies. Emphasize that in the discussion of your portfolio; especially investments in companies related to the particular specialties of the VC firm.
Q: Is there anything I can tell you about our firm? What questions do you have?
This type of question will typically occur at the end of the interview. It represents the final opportunity to differentiate yourself from your competition. You need to focus on asking questions on the current activities of the firm not previously brought up in the interview process. Demonstrate your understanding of the firm’s specialties and be sure to ask what they are looking for in a candidate and how well you measure up to that standard.
This is known as “closing the deal” and you should never leave a venture capital job interview without a strong close.
