Investor Game

A) You are an equity investor. You have in mind three (existing) companies: A, B, C. You can only ask five questions to decide in which one to invest. Task: outline the set of questions. Rules:
1. The companies’ real identities cannot be revealed within the questions
2. You can only invest in one and invest all your available funds in one go
3. A question can either be general (e.g. tell me the industry), absolute number (e.g. revenues) or relative (e.g. relationship between their EBITDA) etc., but should have a SINGLE answer (i.e. give me the revenue of A, B and C counts as 3 questions)
4. They must be set in the logical order (i.e. of importance)
5. Include a very brief rationale explaining how an answer can make you shift from A to B or C
6. Investment horizon assumed at least 3 years

B) How would your questions and rationale change if you were a debt investor.

 
Best Response

Great effort and i look forward to the responses but your question is too broad and I think you need to narrow it down a lot. I think my top 5 are mostly different depending if it's an online venture deal vs an industrial turnaround.

Secondly, IMHO, it's the nuance of the answer that tells me more than the fact of the answer. 5 minutes with each executive and I know each one's useful lifespan and their ability to execute under pressure. I'll give that ability a higher force multiplier than most financial ratios but your scenario doesn't allow those questions.

Global buyer of highly distressed industrial companies. Pays Finder Fees Criteria = $50 - $500M revenues. Highly distressed industrial. Limited Reps and Warranties. Can close in 1-2 weeks.
 

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