Growth Equity Interview Business Model Question

Hey guys!

I recently had a very initial interview with a growth equity fund. They were relatively advanced in their process so I was slightly late, but they cut me off after this first interview. They asked me to compare three business models and pick which one I would invest in. I gave my comparison and my reasons but apparently I must have not performed to the standards. Just curious how you guys would approach this situation?

They told me to compare these three:

  • Casino

  • Bank

  • Fast food chain

Very thankful if you guys could give me your thoughts. It was my first growth equity interview so I would appreciate those who maybe have more experience to guide me since I didn't get any feedback...

Thank you!!

Comments (4)

Pan European Monkey, what's your opinion? Comment below:

I don't think there is a right or wrong answer here but you need to give one and it does not seem like you did. But I assume that they were looking for something as follows:

1) Casinos - stable cash flow (recurring people coming to spend money) but need licenses to expand - so quite regulated. Regulatory risk and money laundering risk. 

2) Bank - very large balance sheet, growth of your PnL is driven by growth in balance sheet so may be too capital intensive to make it a worthwhile investment. 

3) most "traditional business" here, however need to understand differentiation vs other restaurants, cost base structure, etc. Would invest in such a business but would like to understand the above and more DD points.

livinlondon, what's your opinion? Comment below:

Agree, I literally replied something like this but didn't pass. I thought I might have missed something obvious... Thank you though!

  • Associate 2 in PE - Other

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