PE Modeling - Software - Bookings to ARR (First Time)
Asking all tech-focused PE pros. How was it learning about building an ARR waterfall, piecing together retention stats, cutting a customer cube your first time? Was your first time doing this in PE or was there an expectation that you knew how to do this if you came from a tech ib shop? Don't think you see much of this on the banking side (at least from the bare bookings data) but what was your experience like?
What resources do you recommend reading/downloading to learn. Would love to look at any resources that are out there to familiarize myself.
Based on the most helpful WSO content, here are some resources and insights for learning about building an ARR waterfall, retention stats, and customer segmentation in tech-focused private equity:
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By leveraging these resources and engaging with the community, you can build a solid understanding of ARR waterfalls, retention stats, and customer segmentation in the tech-focused PE space.
Sources: Helpful Resources For Breaking Into Equity Research, Keeping Up with the Zuckerbergs (Learning About/Staying Up-to-Date on the Tech Industry), Learning to learn - A short guide at becoming better at what you do, Selfstudy resources, Learning to learn - A short guide at becoming better at what you do
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If you were at a top tech boutique you most definitely should have lots of experience doing this during DD. The customer cube > arr waterfall > cash collection cycle is the core of software modeling, as well as sales team driven modeling for enterprise SaaS.
There sadly is not a lot of quality content out there for free that I could recommend, just wanted to call out that many sellside analysts do leave their stint with this experience
Coming from a larger platform though, you really don't get to do this very often. How difficult is it to pick up?
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