Technology Investment Banking Interview Prep Advice?
I have an investment banking superday coming up for a Technology coverage group (software focus) and I was wondering if there are any technology/software specific technical questions outside of the standard guides that I should prepare for. I already read through the classic BIWS interview guides so just trying to get a better sense of any additional questions that I should expect, thanks.
This is for an entry-level analyst position btw (currently a senior in undergrad).
Know the valuation metrics for different subsectors (e-commerce vs semis vs SaaS). Be prepared to talk about tech deals and trends. Why tech banking, etc.
KBCM?
nah, it's an international bank (non-US origin) but it has a pretty solid presence in the tech space here.
RBC?
Australian
In addition to what the poster below me said, I recommend focusing on why Software/tech. Know a little bit about deferred revenue vs prepaid revenue. There’s some stuff in the guides on SaaS companies, so just ctrl + f for it and find it.
If software focused, know the basics of ARR (how to calculate it, know the typical range for EV/ARR, etc.). Software is a relative simple coverage in terms of not have many nuances, compared to some other industries. It's a hyper focus on ARR with little to no value add coming from professional services/other non-recurring items. Beyond that have a good understanding of key metrics: Logo Retention/Churn, Gross Retention, Net Retention, LTV, CAC. Don't necessarily need to memorize the formulas but know what they are measuring.
Maybe also know about the "Rule of 40" for SaaS businesses. My firms uses this in a decent amount of decks. The idea is that the sum of a relatively good SaaS business' EBITDA margin + LTM ARR/Revenue growth is above 40%. It's a measure of balance between high growth and being capital efficient.
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