Technical Interview prep

To prepare effectively for a Private Investing role, especially at a prestigious firm like Goldman Sachs, here’s what you should focus on:

1. Technical Knowledge

• Financial Modeling: Your FMVA certification is a great start. Ensure you’re comfortable with building and interpreting financial models, especially LBO models, as these are often tested in private investing roles. Practice the three types of modeling tests: paper LBO, 1-hour test, and 3-hour test.
• Valuation Techniques: Be proficient in DCF, comparable company analysis, precedent transactions, and LBO valuation. Understand the rationale behind each method and when to use them.
• Accounting Fundamentals: Brush up on the three financial statements and how they interact. Practice walking through how changes in one statement affect the others.
• Investment Metrics: Know key metrics like IRR, MOIC, and how to evaluate a good buyout target. Be prepared to discuss CAPEX, NWC requirements, and other factors that impact investment decisions.

2. Behavioral and Fit Questions

• Prepare answers for common fit questions like:
  • Why private investing?
  • Walk me through your resume.
  • What makes you a good teammate?
  • What are your strengths and weaknesses?
• Use the STAR method to structure your responses and have backup stories ready to demonstrate your skills and experiences.

3. Deal/Case Experience

• If you have prior deal experience, be ready to discuss it in detail. Highlight your role, the deal metrics, and why the company was or wasn’t a good buyout target.
• If you don’t have deal experience, prepare to discuss hypothetical scenarios. For example, be ready to answer questions like:
  • "Tell me about a good LBO candidate."
  • "What’s an industry you currently find attractive?"
• Research industries or companies you find interesting and be prepared to explain why they would make good investments.

4. Thinking Like an Investor

• Practice investment pitches. Be able to articulate why a company is a good investment, considering factors like market trends, competitive positioning, and financial performance.
• Understand Porter's Five Forces and how they apply to evaluating industries and companies.

5. Resources to Use

• WSO Prep Pack: This is highly recommended for technical and behavioral prep.
• IB 400 Questions Book: A solid resource for technical questions. Focus on areas relevant to private investing, such as valuation and LBOs.
• Vault Guide: Use this for additional behavioral and technical prep.
• Mock Interviews: Practice with friends or mentors to simulate the pressure of real interviews.

6. Practice Under Pressure

• Practice explaining concepts out loud, as you’ll need to articulate your thoughts clearly during interviews. For example, walk through how the three financial statements change given a specific transaction.

By focusing on these areas, you’ll be well-prepared for the next steps in the process. Good luck!

Sources: Guide for Investment Banking Full-Time Recruiting, Private Equity Recruiting Walkthrough – My Experience, Private Equity Interview Questions - 13 Topics to Know, Interviewing for a SA or Analyst position? Here's what I'd want to hear as a VP., An ex-Goldman Sachs insider’s 10 tips on how to sail through investment banking interviews