Preparing heavily to target tech funds in off-cycle, anyone have good advice from recent processes on how to prepare? E.g., what level of requisite tech knowledge is needed, how do modeling tests differ, what sorts of technicals will we be asked?
Also, would love advice on how to answer "Why tech" in a way that doesn't get us dinged. Thank you, this forum is always a lot of help!
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To prepare for tech funds in off-cycle recruiting, here’s what you need to know based on the most helpful WSO content:
1. Requisite Tech Knowledge
2. Modeling Tests
3. Technical Questions
4. Answering "Why Tech"
5. Additional Tips
By combining strong technical preparation with a compelling narrative for "Why tech," you’ll position yourself as a standout candidate. Good luck!
Sources: Is tech all that or nothing more than a buzz word?, Technology IB Coverage Group - Exits, Interview Preparation, etc., https://www.wallstreetoasis.com/forum/investment-banking/preparing-for-tech-banking-interviews?customgpt=1, Q&A: Quantitative Analyst - Machine Learning, Analytics, & Quantitative Research/Investing, Behavioral and Fit
Here's a great primer on SaaS metrics: https://www.forentrepreneurs.com/saas-metrics-2/?__readwiseLocation=
Would also recommend TheSaaSCFO. He has a youtube channel and a website. Lots of great stuff there.
Thank you goat
Most important things that: what makes SaaS so appealing (recurring nature, low capex, negative nwc, etc.), why do you want to do tech, ARR, LTV/CAC, rule of 40, GRR ,and NRR
Other things that you should know: what does retention represent, how to go from MRR to ARR, what is good margins in the SaaS space, what are some value creation levers in SaaS (pricing, sales optimization, spend optimzaiton, product optimzaiton, M&A are prob the main ones you want to make sure you hit), why EBITDA might be misleading for SaaS businesses, when to use EBITDA/Rev vs. EV/EBITDA, what is cross-sell, switching costs, value of integrations
Not fully comphrensive, but think this should be more than enough for associate recruiting. If you know the answer to all these questions, think you are more than adequately prepared to sound smart for tech interviews. I think the articles above are helpful, but they are more focused and I think you are much better served broadly focusing on the industry than getting to bogged down in each concept, especially since a lot of the metrics mentioned are more of start-up founders than investors.
Edit: don't worry about why tech too much, it's a check the box thing unless you really mess it up. If everything else goes well / you can show understand tech, why tech answer doesn't matter much imo because you have demonstrated your interest through good answers.
What do you mean by going from MRR to ARR?
ARR = MRR * 12
I just have found a shockingly high # of people think ARR is just the same as summing up the recurring revenue of the last 12 months as opposed to just MRR x 12. Similar thing with QRR to ARR. Also have seen people mess up multiple math by forgetting to multiply QRR or MRR when given.
Have a few primers, feel free to pm
bump
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