Pretending you've modeled in interviews
Hi guys,
I've noticed in a lot of interviews for all types of roles (not just PE) they ask about my modeling experience. Honestly, I have pretty much zero experience on the job. I was in levfin / cap markets, so I don't know much. Obviously, though, I need to bullshit to the interviewers that I have extensive experience modeling so that I can get a new job.
For those that have pretended to model, do you have any advice? Pretty desperate to leave my current job, so any advice is appreciated.
Thanks!
Always know enough to not embarrass yourself on a test, but I think everyone oversells it
dont worry, the people interviewing you probably don't know how to model either.
haha, I lol'd
Try to ask your friends to send you the models they have done in previous interviews so that you can see the rationale of assumptions, how 3 statements are related and how to do them.
This way you will be able to answer some questions.
But, if the second or third round consists in doing a model from scratch, then you are fucked my man.
I kind of get the thinking here, but boy you are going to set yourself up for failure if you go into a junior PE role and don’t know how to model. Maybe you’d do OK at a large fund that takes a lot of consultants, but even then the consultants will have skills that you won’t have, so you’d be coming up the curve on all aspects of the job. The likelihood is you’re going to develop a reputation early on as the person that needs their hand held on everything, which is harsh but the typical associate program is only 2 years, so a 6-12 month ramp up before you can be staffed as the only associate on a deal is brutal...and people will resent you for it.
That might not be the answer your want to hear, but you really should be teaching yourself how to model well if it’s not part of your day to day job. I’ve seen some lev fin people do a 3rd year in a coverage or M&A group before making the jump. That might be your best move even if you need to take another year. Don’t jeopardize your long term trajectory because of your short term frustration, at least that early in your career.
I second this. If someone came in my group and couldn't do basic modeling, he would be fired shortly. However, modeling really isn't difficult, it just takes a little practice. Bang out some simple LBO models in your spare time and watch some free online materials on modeling. Play around with the CapIQ dcf template on a stock you're interested in. Try to model granularly and think through drivers of each line item. You will improve with practice.
Appreciate these replies, guys.
Honestly, I may have undersold my experience. To be clear, I easily grasp the modeling concepts taught on Wall Street Prep and other online courses. Further, when I've seen models coming from coverage, I understand them. The issue is that when asked about my modeling experience in an interview I have a hard time stretching the truth. The reality is my levfin group just doesn't model at all. With that said, I have no doubt I could quickly ramp up to speed on modeling in a new role. I studied stats / data science in college, so I'm not very intimidated by a basic financial model haha. I think I just need to learn how to bullshit better tbh, which explains why I don't think banking is the right career for me.
Models in private markets are kind of a joke - they basically tell the exact story they want you to tell. If something in the model is surprising you, then chances are it’s wrong
As opposed to models in public markets? Come on...I’m not even going to debate which is “better” but it shouldn’t be controversial that private market investors build significantly more detailed models informed by non-public operating and financial data. Terrible take my man.
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That's sort of the point?
There's a tendenancy on these boards to make financial modeling seem like a lot more than what it actually is.
A financial model is ultimately an intermediate level systems thinking exercise. You have a number of inputs and assumptions that you believe to be true, and if those hold true, you think you can make xxx% return. So yes, the idea is to tell the story you want by using a model that shows your logic in a numeric manner.
What it is not or should not be made out as is a sort of black box that takes in a bunch of assumptions and spits out a magically correct future version of events.
What kind of banks are you coming from— just curious?
curious as well- also there are some levfin groups out there that do model, if my understanding is correct?
Yeah that’s what I thought. The levfin groups I know build pay down models for screening materials all the time
Was my understanding as well, curious to know more about this.
I'm currently deciding between ops to join a blue chip HF's VC arm or $1B PE fund. I have touched excel models maybe 4 times in the last 3 years in any sort of execution capacity. In my experience just reading a couple guides explains pretty much all you could need to know and the rest seems pretty intuitive when they give you a test. I wouldn't even worry about it, just talk about the details within the deal and maybe sprinkle in anecdotes from the experience and what you learned from them. Has always worked for me.
while we're on the topic - apart from wall street prep and macabacus, what are the best sources to learn modeling?
also interested
Fake it till you make it, lol
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