Getting Better at PE Case Studies

You seem to be thinking about it correctly - focusing on the unit economics of a business, its competitive advantages, building a thesis for it. For a case study, you don't really have to have a differentiated investment thesis but just need to show case that you can think through the business at a high-level given you have limited time / domain expertise. You also make it sound like you are passing - even if you disagree with the investment, I would structure case studies as all opportunities to bid and would word the memo that you submit as "Recommend submitting IOI at X multiple off of X EBITDA with potential thesis points of 1, 2, 3, 4 and key risks to diligence of 1, 2, 3, 4." In terms of the deliverable, this is how I would submit:

• SIMPLE model --> maybe have 2 cases in the model but keep the LBO fairly simple. You can call out the key drivers like revenue growth coming from XX penetration into the market and can make this as investment thesis point, operating leverage from underpriced products, etc.
• Unless they tell you specifically, submit in a Word Doc and depending on how much time they give you, no more than 3 pages of text. Structure should be Executive Summary where you call out your recommendation and summarize the business / structure of the deal, overview of the opportunity (products, any key metrics to call out, seller), investment thesis points, potential risks, further areas to diligence
• Checklist investing is fine...but make sure you have 2-4 investment thesis points. There is a lot of noise and information / data in investing and you have to focus on the highest reward outcomes (80/20) in investing and have to get those right. There is so much you won't be able to anticipate in a business or industry but if you focus on the key variables you maximize your chance of a successful outcome. Therefore, make sure your investment thesis points are centered a few things. Don't just make it the generic stuff like taking market share, M&A / fragmented story, margin improvement. Need to think a little more. Just making up an example of potential investment thesis points:

1. Industry hitting inflection point after trough period --> supply / demand was obstructed but demand has caught up finally and expect demand to continue to rise. Opportune time to invest in this industry and this business is an attractive player in this segment
2. Attractive portfolio of products that are not being valued correctly --> i.e., buying WholeCo at 10x but has high margin, high growing products / segment that deserves higher value. SOTP never works in the public markets but in the private markets you can actually split up businesses and reap the cash to drive returns (dividend, debt paydown, capex investments)
3. Large universe of buyers at exit and ways to monetize the business. High FCF generation / EBITDA growth offers room to div recap de-risk initial investment
4. Other upside opportunities through XYZ tailwinds that business doesn't currently serve, focusing on acquiring sub-scale businesses and integrate, replacing management team

And when discussing the investment thesis, I would word it in the case study like here is my hypothesis and here is what I need to confirm. I.e., if industry is growing 10%+ and business is growing 5%+, there is opportunity to accelerate volumetric growth but need to understand strategy around this (do we have to invest in a sales force, do they have the right products, what are customers saying and why have they not been in line with market growth, is the business near capacity and we need to invest in additional capacity).

And then you do the opposite for risks. 3-4 key risks that you need to get comfortable with and explain HOW you will get comfortable. I.e., business is a smaller player in a large market with bigger competition. Well mitigant could be they serve a specific niche, this creates room to be more agile vs. competitors. Or a risk being execution around around building a facility for capacity expansion. Mitigant would be you as a sponsor can bring value here, management has laid out clear plan but need to diligence further, they've backfilled capacity with existing customers, etc.

Just some ideas..... Good luck!!!