Recently been recruiting for a buyside role and I would say the most common question I have been receiving from their more Mid to Sr. level folk has been the question of “So give me and example of the best business you’ve ever seen”.
I was curious if you all had similar experiences and if so what your answers were?
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Prop firms. Basically guaranteed scams unless you're an exceptional investor (aka you're lucky). Make guaranteed revenue based off evaluation/membership fees, rarely ever give payouts because the chances of profit are so low given various restrictions/covenants that the prop firm places, and convince overly ambitious but simultaneously incapable daytraders that their Grok AI algorithm can somehow best institutional investors with billions in resources. They're basically casinos except even less likely to pay out statistically. Absolutely phenomenal business model, albeit unethical in my opinion.
Bumping this, would love some help in answering this question. Doesn't have to be specific answers but for advice on how to structure an answer / come up with the right idea would be super helpful
Following
Gotta be Arby’s
private equity firms.
Yup, best biz model on earth… at scale, a PE GP will run at 50%+ profit margins, not factoring in any carry. No wonder GP stakes firms are putting huge valuation multiples on these businesses.
Caveat - BIG PE firms. Mediocre mid-sized firm is having trouble raising fund V so you have atrocious terminal value. Brookfield is setting up their digital crypto infra greentech strategy and winning another $5B.
Certain kinds of contract manufacturing/private label businesses. Margins are not insane, but NRR well over 100% in many cases, even on a PO-based model
Just say Visa, Mastercard, Costco, an airport, toll road operator, etc. There’s no pts for creativity in these questions.
visa, mastercard, airport all make sense, but why costco?
the most classic "compounder" stock. have been growing ROIC for the past +20 years
Some of these answers show why PE firms u/p because they pick ass businesses instead of obvious answers like visa
It’s Google and it’s not a contest imo
Onlyfans...
I'm not talking about the women getting pimped, I'm talking about the founder and their antisocial model. No marketing, just a bunch of pornstars and their managers fighting for scraps while he takes 20%. He would make any pimp blush.
Netflix for prisons. Captive audience = recurring revenue. Subscription model. Capital light. Large TAM. high value (lots of free time). Revenue highly predictable (particularly for felons).
If you say Visa, just know that 90% of the respondents are giving the exact same answer (or mastercard)
So what? The question is best business, not best investment. If it's the best, it's the best...
Do you think there's only one answer to this question? Visa is easily understood and a good business, sure, but I don't need to explain the value in having a differentiated answer during an interview
This hasn’t been mentioned. The best customer is the government. Businesses that service the government: Low customer churn, recurring, can be above market prices, largely shielded from competition, quietly making bank.
Hi from DOGE
Irony is the guy running (who ran, past tense) DOGE knows exactly what I’m talking about.
Most, keep a low profile. They don’t need to shill themselves on LinkedIn or social media like the other pleebs.
Look up the ltm share price performance of booz Allen Hamilton (bah), saic, and others.
Promotional products business that sells branded merchandise on a contract basis to SMBs and enterprise customers. 40-50% gross margins. Yearly contracts. Zero inventory. Great CCC. Lots of sector consolidation and super fragmented. 90% of the 20k vendors are smaller mom and pop shops that barely know how to use a CRM. It’s the most underrated sector on the planet.
Sell courses
IntraFi
Restaurants in prime touristy locations
If you're well connected in a niche, staffing agencies can be an interesting business to be in. Maybe not so much in recent years but if you outsourced your admin / employees overseas, margins can be great. Knew more than a few multimillionaires who have businesses in this space. B2B model, have contracts and incentives with employers to staff them.
I've thought about doing the above eventually. Have a niche in mind.
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