PE interview next week and trying to prep how to walk through a deal on my resume but I only have one and it still hasn't launched (after 6 months) AND the firm is a potential buyer. How do I walk through without discussing sensitive information?
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Based on the most helpful WSO content, here are some tips to walk through a deal in your PE interview while avoiding sensitive information:
Set the Stage:
Discuss the Rationale:
Outline the Process:
Highlight Challenges and Solutions:
Use Broad Numbers:
Focus on Your Role:
Conclude with the Outcome:
By following these steps, you can effectively walk through a deal in your PE interview while maintaining confidentiality and showcasing your knowledge and skills.
Sources: "Walk me Through a Deal You Worked on" Interview Question, https://www.wallstreetoasis.com/forum/real-estate/walk-me-through-a-deal-you-worked-on-interview-question?customgpt=1, How to talk around confidential info in deal discussions?, How to Talk About PE Deal Experience?, "Walk me through a deal" for consultants
Structure should be something like this:
Overview of the opportunity: ie “Company was looking to raise primary and secondary capital to finance xyz and derisk management”
Overview of the business. What do they do?
Overview of high level metrics: typically I give ranges for this. “Business is sub 50m top line with 10 to 20% ebitda margins and 110+ net retention etc..”
Overview of highlights and considerations
Your thoughts in the business and recommendations. I typically try to touch on the structure here and see if I would do anything differently looking back. Ie “We bought common shares at xyz multiple.. looking back I would’ve preferred that we bought Series b shares because of xyz etc”
Overall I think if you follow this structure you should have some success.
Super helpful thank you! Am I allowed to discuss specific metrics / quantify?
Just estimate / use round numbers - around 4x, between 6x and 8x, approx. $100MM. No one actually cares about the specific number, they care that you can recall details and understand the context.
Walk them through your investment thesis without mentioning names / identifiers in an abridged way just like you would on a Monday morning meeting or investment committee presentation. If it's too close to home, just tell them that you're going to be a little generic on specifics because of potential confidentiality reasons, will share everything you can, but will dig deeper into the principles behind the deal and how you thought things through.
Start with the punchline - 1) Here's generally what the business does without identifying, its an attractive business that we wanted to own and believe we'll earn a differential risk adjusted return, I'll share why:
2) Here's the key elements of my investment thesis / consideration [have a perspective at least on market size and growth rate, target competitive position, product differentiation, team, financial prowess]
3) Key risks identified and how you plan to mitigate them [this will then flow into value creation plan as well]
4) Here's my value creation plan [VCP is critical today as the market is too efficient now to buy low and sell high] and how you have more than 1 way to win
5) Here's my exit hypothesis [multiple buyer sets, multiple exit avenues] and targeted returns
Have the key metrics [historical and targeted sales, gross profit, EBITDA, Capex and related margins and growth rates,customer concentration, product concentration, targeted IRR, MOIC, etc.] memorized to demonstrate detail orientation
If it hasn't launched, would it be too confidential to discuss actual metrics?
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