Recruiter's Glossary

Examples: Deal Flow • Tag-along Rights • IPO

MFN

Term from Venture Capital industry explained for recruiters

MFN, which stands for "Most Favored Nation," is an important term in venture capital and investment agreements. It's like a promise that ensures investors get the best possible deal terms. If a company gives better terms to a new investor later, they must offer the same benefits to earlier investors who have this clause. Think of it like a "best price guarantee" in shopping - if someone else gets a better deal later, you automatically get that better deal too.

Examples in Resumes

Negotiated MFN rights for seed-round investors in multiple startup deals

Structured investment agreements including Most Favored Nation clauses for early-stage investors

Reviewed and implemented MFN provisions across portfolio company investments

Typical job title: "Investment Associates"

Also try searching for:

Venture Capital Associate Investment Analyst Venture Associate Investment Manager Deal Associate Private Equity Associate

Where to Find Investment Associates

Professional Networks

Job Boards

Industry Resources

Example Interview Questions

Senior Level Questions

Q: How would you handle a situation where a portfolio company wants to give better terms to a new investor, potentially triggering MFN clauses?

Expected Answer: The candidate should discuss balancing existing investor relationships with company needs, understanding implications of triggering MFN rights, and strategies to structure deals that maintain good relationships with all parties.

Q: What are the key considerations when structuring MFN provisions in early-stage investments?

Expected Answer: Should demonstrate knowledge of different types of MFN terms, their impact on future fundraising, and how to protect both investor and company interests while maintaining flexibility for future rounds.

Mid Level Questions

Q: Explain the difference between narrow and broad MFN rights.

Expected Answer: Should explain how narrow MFN rights might apply to specific terms while broad rights cover all terms, and discuss when each might be appropriate.

Q: What are common exceptions to MFN clauses in investment agreements?

Expected Answer: Should mention strategic investors, accelerator programs, and other special circumstances where MFN rights might not apply, and explain why these exceptions exist.

Junior Level Questions

Q: What is an MFN clause and why is it important in venture capital?

Expected Answer: Should explain that MFN ensures early investors get the best terms offered to later investors, protecting their interests as the company raises more money.

Q: How do you identify if an investment agreement contains MFN rights?

Expected Answer: Should demonstrate ability to review basic investment documents, locate MFN provisions, and understand their basic implications.