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Jun 11, 2020 - 1:32am

For PE:
(not a "complete" list - no such thing)

Financial Modeling:

Simple LBOs, 3-statement LBOs:
* Operating builds for revenue – by customer, by cohort, by product, ramps etc.
* Scenario building (base, downside, upside, add-ons, other bespoke)
* Debt and cash flow schedules
* Tax modeling – NOLs, DTLs, DTAs
* Unique capital structures and cap tables – other debt tranches, PIK, preferred equity, seller notes etc.
* Covenant analysis
* Management equity incentive plans – earnouts, EIPs, rollovers + wealth waterfall
* Accretion / dilution (add-ons, major M&A)
* Sensitivity analyses (what-if, solver)
* Funds flow (at closing)

Financial Analysis ("QoE"-like, help from QoE vendor such as EY, PwC):


  • Revenue recognition – incl. new rules such as ASC 606 etc.
  • Cash proof (discrepancies between books and bank/cash statements)
  • Classification of expenses
  • Compensation policies (base, bonuses, commissions, benefits)
  • Meaning of unique line items – bad debt, goodwill etc.

Adjustments – assessment of validity

  • Simple
  • Pro Forma (for acquisitions etc.)
  • Run-Rate (for rest of year)
  • Fully ramped (for ramping contracts)
  • COVID (?)

Net Working Capital – fluctuations/volatility, debt vs. debt-like items, cash vs. cash-like items, negotiating how much NWC to have at close

Ratios and metrics – margins, spreads, CAGRs, EBITDA/Revenue bridges

Company Data Analysis:

Fundamentally dealing with large, complex, sometimes unclean data sets – clean up, restructure, organize and convert into meaningful insights that tell a story.

Increasingly also modern large-data and visualization tools that are not Excel/Powerpoint – Power BI, Tableau, PowerPivot/pivot tables, Domo, Sisense.

  • Customer rollbacks/rollforwards
  • Cohort analyses
  • Revenue segmentations
  • LTV/CAC analyses
  • Attrition/retention rollforwards, curves
  • ACV realization
  • Pricing analyses
  • Contribution analysis
  • FTE trends – employee turnover etc.
  • Unique operational KPIs – efficiency, processing times

Market Data Analysis (help from consulting vendor such as McKinsey, Bain):

  • Market sizing: top-down, bottoms-up
  • Competition mapping
  • Survey / interview design, Net Promoter Score

Legal Analysis (lots of help from law firm such as Ropes & Gray, Skadden):

  • NDAs / joinders – terms and negotiations
  • Writing bids and offer letters
  • Negotiating and understanding the Stock Purchase Agreement (SPA)
  • Customer contracts and terms (and implications for business/model/thesis)
  • New employment agreements for management
  • Anti-trust/HSR fillings

("Technical") Communication and Organizational Skills:

  • Writing a concise, thoughtful, and well-organized investment memo (need to believes, identifying key risks, asserting an evidence-backed thesis)
  • Communicating complex, technical ideas in effective slides – clean and concise charts, diagrams, tables
  • Workplan and timeline planning
  • Managing various third-parties and internal investment team's pressures, commitments, skills and personalities to achieve execution
  • Intern in IB - Restr
Jun 11, 2020 - 11:50pm

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