I received and answered this question on Quora recently: Link to answer on Quora

A venture capital firm asked me to provide investment recommendations for an interview together. What should I present in particular? How can I prepare for this interview?

A venture capital firm is considering you for a position and has asked you to interview. Congratulations! I hope that this is a position to which you aspire and that this is a positive career step for you.

I’m going to make several assumptions about your question in order to be able to answer it. First, I’m going to assume that you are interviewing for a junior analyst position, since this is the kind of question that a VC firm interviewer might ask a candidate for a junior analyst position.

Second, I’m going to assume that you have just graduated from school and do not have deep connections in your local investor or startup ecosystem.

Third, I’m going to assume that this is a traditional venture capital firm of some size, with a typical structure of MPs, GPs and LPs and that they are looking to invest in new, high-potential, high-growth startups.

Fourth, I’m not going to make any specific assumptions about the firm’s investment thesis or focus area, but you need to keep that focus area in mind as you prepare for an interview.

They have asked you to prepare “investment recommendations” and you would like to know what they mean and how you might do this. Secondarily, you also want to know what you should prepare and how you should present.

First, you need to read up on how VC firms work and especially study the focus, portfolio and leadership of this firm in particular. You need to know the biographies of the founders, since these biographies almost always heavily influence the character of the firm. You need to read what they have published, both on their website and off. Good VCs are writing, speaking and contributing to their startup communities.

Second, most importantly, you need to understand their portfolio of prior investments. Really, the portfolio is the purest and truest representation of the firm’s interests and operations. Where they have put their money and any statements they have made around those portfolio companies will greatly help you to understand what the firm is really doing and what they might be searching for in a junior analyst.

OK, so you’ve done all of those things, studied the info, can list the firm’s portfolio companies and take a guess as to why they’re in the portfolio. And you can recite the managing partner’s bio in detail. Now you need to take that info and apply it.

Ideally, you would be deeply embedded in the local startup ecosystem. You would be attending events at which promising startups are pitching and would be meeting founders and co-founders and angel investors and community facilitators, etc. You’d have a list of great startups in your back pocket.

Of course, that’s a lot to ask of a junior analyst candidate. You haven’t done those things, or you’ve only done them a bit. So you’re going to have to fake it.

Here’s the crucial next step: Meet some startup founders, watch them pitch at events if you can, and ask for their pitch decks. Some may refuse but many will agree. Focus on the ones that you feel are likely within the focus area of the firm with which you are interviewing!

Obviously, you should really target startups that are ready for a Series A round that a VC firm could lead. This means focusing on the startups that have had a round or two of angel investment, maybe a pre-seed or seed round and are itching for a Series A. This will be a small subset.

Then, go through the pitch deck with the founder and understand what they are trying to accomplish. With focus, this might take 20 minutes. More importantly, understand how they are trying to appeal to investors. If they have survived to the point of seeking a Series A, they have figured out a hook that works. They’re probably doing something right. Maybe. Find it. Find what they are doing right, because that is going to be your key to getting a job as a junior analyst at a VC firm.

Here are some quick suggestions. Understand the startup’s sales traction and what works about their strategy. Understand the founders. Where are they coming from and why are they doing this? Understand the startup’s market, including addressable market and their go-to-market strategy. Understand their growth strategy, future potential markets and buyers. Understand their key partnerships, key vendors and stakeholders. Understand their product and how it compares to the competitors. You’ll notice that I put product last on this list… There’s a reason for that. For investors, like a VC firm, all of those other questions need great answers before the product matters very much!

Now, you’ve done your homework. You’ve met with some startup founders – quickly, over a coffee at a startup event – filtered through the terrible ones and now you have a small collection of well-understood pitch decks from interesting startups. You’re nearly ready for your interview.

And what will you present? You will go through each of the startups you have identified and present the highlights of that startup and give a specific outline of why you believe they could be potential investments for the VC firm. You should explain why you like the companies, their founders and products, how they are filling a real need, describe their potential market and current market traction and, most importantly, explain how you could see the investment playing out and how an investment would fit into the VC firm’s thesis, strategy and goals, so far as you understand these things, based on your research of the firm.

You will certainly have gaps and incorrect assumptions about the VC firm based on incomplete information, but the interviewer will understand that going into the interview. And your grasp of the startup or how it fits into the market will be incomplete, even if you spend some time researching it. The interviewer should understand that researching a promising startup would normally take days or even weeks for a junior analyst, so don’t get hung up on making mistakes or providing too much detail. Demonstrate your ability to quickly collect evidence, to research a company and an industry briefly, and your ability to analyze, especially including overall trends in the industry and possible exits. Finally, demonstrate your application of the VC firm’s investment thesis to the startup under discussion and your ability to apply investment reasoning to the question of whether to invest. If you can do these things concisely and logically, you should prove to be an excellent candidate.

Finally, relax. VCs are just people, looking for good people to hire. The job of a good Managing Director at a VC firm is to find the best people who are really passionate about startups and to keep them happy, involved and productive. A good VC is not going to be rude or short with you and will certainly understand the shortcomings of your analysis, given you experience level and brief time to prepare. Have fun, show some personality and, most importantly, show some passion for the startups you will showcase. Good VCs, just like everyone else, want to hire people that can (a) do the job; and (b) would be fun to work with. If you can demonstrate those two things, you’ll have your best chance at the position.

Also, you should really read Brad Feld’s Venture Deals Book: Amazon.com: Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist (9781118443613): Brad Feld, Jason Mendelson, Dick Costolo: Books

Good luck on your interview and thanks for the question!