Interview Questions for Venture Capitalists

Time: Approximately 30 minutes

Important: When answering, please try not to have later questions influence your answers to previous questions.

1.     Incubators come in various models and forms. Is there a particular way you would define them?

2.     What do you think of incubators in general? Do they provide value beyond what a top-tier, or non-top-tier VC provides? Speak either generally or with specific examples, if you have any.

3.     Do you ever see business plans that aren’t just right or missing one or more key components, but think there might be an opportunity? If so, would working with the right incubator be useful in this instance?

4.     Would a firm like yours work with an incubator, and how do you foresee that happening (many firms are just figuring this out, so even preliminary thoughts would be useful)? Like a first-fund venture fund, would you be concerned about the incentive structure of building the incubated company to “last” or building to “flip”?

5.     Has your firm funded later rounds of an incubated firm? If so, do you feel there was value in the firm that otherwise wouldn’t have been? Valuation effects?

6.     If you don't see value in current forms of incubators, is there an ideal form that you would like to see, and perhaps work with, if at all? Differentiate between US based and those that are International, considering many of the challenges entrepreneurs face in other countries.

7.     Say for instance that Darwinian Theory applies to capital deployment and that the smart entrepreneurs with great ideas find smart capital (e.g. a top-tier VC firm with a big rolodex – question: is this smart capital?). This then means by the process of elimination that the next-level down of ideas/entrepreneurs go to the incubators. Or, perhaps the market is big enough that the incubators will have some successes as well.

8.     Do you see your role different from incubators? Do you see yourself as a type of incubator? If so, how many ventures can you take on simultaneously and how do you work with them, aside from your usual way of working with other ventures, or is this how you work with all your ventures?

9.     What’s your opinion on vertically specialized incubator that have deeper domain expertise in a certain area? Would you be worried about cannibalization within the incubator? How would you balance the lack of industry diversity or too narrow a focus?

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