An MBA degree in Private Equity and Venture Capital jobs is pretty much a standard. Over 50% of the respondents were MBA’s (or had an international equivalent post-graduate degree) and 82% in total have an advanced degree of some sort. It turns out the pay difference, however, is not all that significant. The survey indicates that MBA’s earn a base salary 19% higher than non-MBA’s. This gap is narrowed by the difference in bonus payout, where MBA’s receive a 6% smaller bonus. The vacation benefits for both MBA’s and non-MBA’s were found to be similar.

From the 2007 Private Equity and Venture Capital Compensation Report by Job Search Digest

In 2007, Job Search Digest conducted a survey of professionals who were involved with venture capital or private equity investment firms. There were hundreds of respondents from various parts of the world. Participation from firms both large and small such as: Credit Suisse, Labrador Ventures, Intel Capital, Mayfield, New Enterprise Associates, and SoftBank Capital.

The survey results address issues such as the compensation earned by professionals and their work satisfaction. The survey also aims to understand how these professionals perceive their work and what they expect from their employers.

Some notable findings include:

• The annual average compensation for professionals in the industry is $224,000 with an average 3.5 weeks of vacation benefit.
• Nearly ½ of respondents bring at least 10 years of work experience to the table and only 5 years of private equity or venture capital experience.
• Despite solid compensation packages and an optimistic view of future pay increases, there is overwhelming dissatisfaction among most of these professionals.
• Although common in the industry, an MBA doesn’t guarantee better compensation.
• The difference between the UK and US in terms of compensation and overall work and personal life balance is negligible.
• At the lower levels, there is very little difference in cash compensation between the US East and West coasts and even the Central states. The differences become significant in the higher level positions.

Job Search Digest is preparing the 2008 survey and will again invite industry insider to participate in the most comprehensive study in the Private Equity and Venture Capital industry. The results help private equity job and venture capital job seekers better manage their career and fund managers to differentiate the benefits of working for their particular firm.

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.

Continuation of our series of posts on preparing yourself for common questions during a venture capital job interview.

Q: What’s been the most interesting IPO or acquisition in our industry in the past year?
Passion for particular industries and achieving a highly profitable exit are common threads that tie venture capitalists together. This question provides ample opportunity for you to shine. Study the ins and outs of an IPO that relates to the VC firm’s niche interests – and prepare your analysis. Discuss the potential you see for the company, and how they could strengthen their market position. Treat this question as a “test” of your industry knowledge and an opportunity to impress your interviewer with thoughtful analysis.

Q: What blogs do you read? What sparked your interest in the blog sphere this week?
The venture capital world is a highly connected, networked world. Networking is the key in the industry, especially if you are trying to bring new deals to the table. Subsequently, some prominent venture capitalists publish personal blogs, highlighting their perspective on recent deals, upcoming IPOs, and general industry commentary. Reading these blogs can give you insight into the current VC thinking and new developments in the venture capital industry.
In addition, brush up on blogs that may be outside of the VC realm, but are specifically connected to your passions and interests. If green technology is your forte, make sure you can discuss how Google’s RE < C is making changes in renewable energy. If social marketing captures your professional attention, make sure you can speak authoritatively on how corporations should incorporate Twitter into their campaigns. Regardless of your industry, make sure that you are in tune with the blog conversations – showing the VC interviewer that you are highly connected and have your finger on the industry pulse.

Q: Why are you looking to leave your old position?
Make sure you have a well prepared response to this one. Do not to be too critical of your present employer or situation. Negativity is never well received in the interview process. Your answer should concentrate on frustration with not being able to fulfill personal goals on your current path. Answer the question based on some feature of your present employer that hinders the growth that you desire for yourself.

The response should bring attention to your strengths and skills that are being underutilized by your present position and would be a great asset in the venture capital industry, and in particular to the firm with which you are interviewing. At the same time, you do not want to highlight handling tough situations as a weakness, and your answer should present you as someone who is able to handle challenges as part of the job.

Q: Where do you see yourself in five years time?

You want to leave the impression that you are a dedicated individual who seeks long-term commitments. You already have the experience and skills it takes, and you are looking for a career where you can shine.

You should definitely express the intention and diligence to eventually become a general partner of the firm. State that you will earn your promotions by letting the results of your work speak for themselves. Be ready to answer the next question “What types of results can we expect?” and use a professional success story demonstrate what you bring to the table.

Stay tuned for the final chapter of Venture Capital Job interview questions.

Venture capital careers are competitive, with many more interested candidates than open positions. Subsequently, a venture capital job should be considered only after you have many years of successful, hands-on company experience.

Noted Silicon Valley speaker, author, and venture capitalist Guy Kawasaki put it best when he said if you were the entrepreneur across the table, “Why would you want advice from someone whose background consists of working in a college bookstore or cranking spreadsheets at an investment bank? Financial models are almost totally irrelevant because there’s no financial wizardry involved in making a good product and selling the heck out of it.” Indeed, there is no “market” for these young companies, so the value is created by bringing a great product or service to the world and getting people interested enough to buy.

Preparing yourself for common questions will help you shine in your venture capital job interview. Whereas many of the questions for VC job interviews are general in nature, there are others that are unique to venture capital.

Q: Why do you want a job in venture capital? Why our firm?

You should have conducted extensive research on the firm and now possess an intimate knowledge of the company and the industry – allowing you to truly distinguish yourself from other candidates.Your answer should show a general enthusiasm for investing in young companies – and not mention at all the significant compensation associated with it. This is your opportunity to convey your passion for early stage company activities. If your answer focuses on a love for Excel spreadsheets, you can forget about getting to the next stage. What part of seedling companies gets you fired up? Project that energy and you will connect with the same passion as the interviewer sitting across the table from you.

In addition, you have to point out how the particular firm you’re interviewing with fits with your desired career path. Try to be specific and detailed in your answer as to why your background would be ideal for this firm.

Q: What are the some recent developments in our industry?

Venture capital firms are seeking employees with proven expertise, often times in a particular industry in which the firm focuses. It is critical in questions like these to demonstrate your industry insights. According to research conducted by Jobs Search Digest, approximately half of surveyed VC respondents have more than 10 years of experience; subsequently, you must ensure that your knowledge base shines competitively in the interview.

You should not only showcase your competence in the overall development and trends in the industry, but also elaborate upon the specific influences that are currently affecting the market. You have to demonstrate knowledge that only an experienced industry insider would have. In this case, the discussion of a particular company’s product release or strategic decision would be a great method to do exactly that.

Stay tuned. More interview questions for Venture Capital Jobs to come.

According to the Wall Street Journal Blackstone Group hired Merrill Lynch’s Laurence Tosi into a Private Equity Job as its chief financial officer.

The private-equity firm’s current CFO, Michael Puglisi is staying at Blackstone and will work on special projects for the firm.

Early stage technology focused Venture Capital firm, seeking a full-time, pre-MBA Analyst who will be an integral member of the investment team and will be involved in all aspects of the investment process. Candidates with MBA will not be considered.

An exclusive venture capital job from JobSearchDigest.com

Global emerging markets private equity investment firm which currently manages $2 billion in assets. Responsible for Quantitative Analysis and Reporting, Corporate Support, Marketing Production, and Market Research. 5+ years of relevant experience, preferably in a business development, investment management or marketing capacity required.

An exclusive private equity job from JobSearchDigest.com

A leading private equity firm with multiple large funds seeks an experienced financial professional to join their organization as SVP Fund Administration. The SVP Fund Administration will oversee a large group of financial professionals (20+) responsible all aspects of fund accounting and administration for the organization. Ideal candidates should possess 10 plus years of related financial management experience either with in the alternative investment industry directly or with a service provider, public accountant, or third party administrator.

An exclusive private equity job from JobSearchDigest.com

Sometimes Venture Capital Job interview questions are meant to test the logic of the candidate. Here is one that has been used successfully in the past and getting it right could take you to new heights!

A test rocket is released when it is 96 feet from the ground. The rocket rises 3 feet, then falls 6 feet, then is boosted 12 feet, then falls 24 feet, and so on.

If each rise or fall of 3 feet takes 1 second, in how many seconds will the rocket hit the ground?

Read the rest of this entry »