case study corporate finance interview

Financial Services Case Interview: 4 Tips on How to Pass

• Last Updated May, 2024

A good case structure will get through any consulting case interview question. But some industries have specific issues that make it a lot easier to pass the case if you know what to expect. Financial services case interviews are like that.

Government regulation of financial institutions, their corporate structure, and business models are quite different from other industries, so it’s good to brush up on the financial services industry before facing a case.

In this article, we’ll discuss:

• Differences between financial services firms and other firms.
• Common types of financial services case interviews.
• A financial services case example.
• 4 Tips on acing your financial services case interview.

Let’s get started!

Differences Between Financial Services Firms & Other Firms

Financial services case interview example, common types of financial services case interviews.

5 Tips On Acing Your Financial Services Case Interview

Financial services firms don’t make cars or serve hamburgers to customers to generate revenue the way an auto company or a fast-food restaurant does. Instead, they provide retail customers (individual consumers – people like you and me) and businesses with loans, deposit accounts, or insurance policies. Or they help them invest their money in stocks, bonds, or other financial instruments.

Corporate Structure

There are many different types of financial institutions and they exist both on paper (e.g., online banks) and in actual brick-and-mortar form (e.g., retail bank branches with ATMs). Typical financial institutions include:

• Commercial banks (provide business loans, home mortgage loans, and savings/checking accounts)
• Investment banks and securities firms (help people buy and sell stocks and bonds and help companies issue them)
• Insurance companies (provide insurance for homes, cars, business risk, health, etc.)
• Mutual funds and pension funds (manage retirement savings or savings for other goals, e.g., education, health, etc., by investing it in stocks, bonds, and other assets)
• Microfinance companies (provide small loans to populations underserved by traditional financial institutions)

Businesses that “make stuff” have a factory where parts go in one end and cars or hamburgers go out the other. Financial institutions, on the other hand, have people who handle the bank accounts, stocks purchases/sales, or insurance products that they provide, and all the investment decisions and paperwork that go with that service.

Business Model

Unlike other sectors, the financial services industry’s business model is largely based on interest, fees, and premiums. Don’t get bogged down by the variety of products and services that a financial institution has to offer. You only need to remember:

• Key income sources: interest earned by selling retail and corporate loans, premiums earned on insurance policies, fees earned on financial advisory (e.g., stockbroking) or on deposit accounts, etc.
• Key costs: interest paid on deposits from retail investors and corporates, insurance claims/payouts, branch operations, manpower, SG&A, etc.

Always confirm and validate the drivers of revenue and cost with your interviewer before jumping to solving any financial services case.

Regulation and Risk

A well-functioning financial system is vital for the economy, businesses, and consumers. When a financial institution fails, it can create problems for the wider economy as the 2007-2009 financial crisis showed us. Financial services firms, therefore, attract high levels of scrutiny and oversight.

Government regulation helps make sure that these institutions have good management so they don’t make bad investments or become too risky. They require that financial institutions hold “shock absorbers” (i.e., capital) to help deal with bad investments. Each country has its own set of norms and regulations that create the framework and operating model for financial institutions.

In a financial services case, therefore, it’s always important to include regulation as a category in your issue tree. You can check with your interviewer on which aspects of financial regulation and risk are relevant to ensure that ideas you brainstorm in the case won’t break laws. Aligning on this upfront increases your credibility with the interviewer, but regulation is not typically the focus of the case.

Nail the case & fit interview with strategies from former MBB Interviewers that have helped 89.6% of our clients pass the case interview.

Financial services cases can include revenue growth, cost reduction, or new product introduction like they would for any other industry. They can also include managing the “back office” where financial account information is maintained or stock and bond trades are cleared.

Here are some financial services case interview examples:

• Disconsa – A McKinsey case on developing better financial service offerings for a not-for-profit entity serving remote Mexican communities.
• Internet Bank – An L.E.K. case on product diversification for a large insurance company in Europe.
• Big Bucks Bank – A Deloitte case on technology transformation for a large US-based bank.
• Bank of Zurich – A Deloitte case on developing a strategy to structure the organization’s data program.

We’ve also curated a list of case examples , to help you hone your business problem-solving skills. Head to Our Ultimate Guide to Case Interview Prep to learn what a case interview is and its various stages (i.e., opening, structure, analysis, and conclusion). The best way to get smarter about answering financial services case interview questions is to master this general four-part approach first and then apply financial services specifics as appropriate.

Let’s dive into a financial services case example.

Case Question

“Your client is Go-for-Growth bank, a large bank in a frontier market that wants to rapidly build its agent network to grow revenue for its payment and banking business. How should they go about it?”

First, repeat the main information in the prompt to the interviewer to make sure you got it right, and ask clarifying questions. If you don’t know what a frontier market is or who banking agents are, ask your interviewer.

Frontier market is a classification made by Standard & Poors, a financial rating agency, that’s used to classify less advanced economies in the developing world, e.g., Vietnam, Kenya, Nigeria, Cambodia, etc.

A banking agent is a retail or a postal outlet contracted out by a financial institution (in this case Go-for-Growth bank) to process clients’ transactions. Typically, in less advanced economies, the population has little access to banks but significantly higher interaction with establishments such as pharmacies, grocery stores, post offices, and beauty salons. The agents help the banks get new customers and typically make money on commissions.

Take a moment to develop your own hypothesis for the Go-for-Growth bank case.

Financial Services Case Hypothesis

Your hypothesis could be that a banking agent is a cost-efficient way for the bank to acquire customers and distribute financial products vs. having to set up their own branches across the country (including paying rent for office space and hiring staff in each location).

Next, validate your understanding of the bank’s business model, corporate structure, and applicable regulations. Here, the bank is a traditional commercial bank that wants to add agents as a channel to acquire retail customers and sell traditional financial products and services (e.g., loans, deposits, etc.) Building an agent network is allowed within the regulatory framework of the country.

A great candidate would also establish:

• The purpose of agent acquisition: “Why agents?” “Why now?” and “What is the size of the opportunity (or market) that the bank is chasing?” Here, the interviewer can confirm your hypothesis about agents being cost-efficient vs. Go-for-Growth Bank having to set up brick-and-mortar establishments.
• The size of the opportunity: Establishing an agent network is a big undertaking so it’s worth ensuring the opportunity size is big enough to justify the cost. In this case, the total opportunity size is $3 billion given the country is largely underpenetrated with only 10-20% of the total population of 100+ million having access to financial services, so the opportunity is worth it. (Note that to make this a short case or one that would be appropriate for undergrad summer interns, sizing the market could be the sole focus.)
• The client’s key success metrics : “What does success look like to Go-for-Growth Bank?” Here, you should clarify the target network size and the target timeframe to meet the client’s growth target. Say, your interviewer adds that they want to scale up to a size of 200,000 agents in 2 years to achieve the topline impact of $3+ billion.

You’d now ask for a minute to lay down your thoughts so that you can build your structure.

Take a moment to think about how you would structure this case before reading ahead. That will give you a sense of what business issues come naturally to you in a financial services case and where you need to push your thinking further.

Here’s a sample case structure:

• Which services/revenue streams should Go-for-Growth Bank market via the agents and to which end customers?
• Which of the existing products and services are most profitable?
• Which products and services don’t need extensive training for agents to sell?
• Which products and services best meet the needs of the customers who agents serve (e.g., payments and basic deposit accounts and loans, not more sophisticated financial products).
• Is there a segmentation of customers who should be targeted by the agents?
• Will the bank need to tweak their products to make them profitable to customers acquired through the agent network? (An A+ answer would note that clients with low incomes or lumpy earnings might need bank accounts with lower minimums.)
• Is there opportunity for cross-sell/ up-sell of products to customers?
• How to reach the agents? (sales force/feet on the ground vs. email campaign)
• How to get them interested in becoming a channel partner? Will one-time, up-front incentives be required?
• What is the process to get them on board?
• What cut can be given to the agents (so the bank continues to be profitable)?
• What will be meaningful for the agents?
• Can gamification reward schemes be introduced?
• Would certification or co-branding, such as a sticker to display the agent’s affiliation with Go-for-Growth Bank, appeal to potential agents?
• What banking products can be sold to the agents?
• Can the agents be offered discounted pricing on the products?
• What is the up-front effort/cost to acquire agents?
• What is the expected revenue or profit uplift per agent to the bank?
• How much should each agent sell annually/monthly to continue being profitable to the bank?
• What are the recurring costs to maintain the agent network?
• Which metrics should be used for tracking performance?
• Can low performers be segmented further based on their potential?
• What will be the plan of action for consistent low-performing agents?
• Which training(s) and products’ brochures should be offered to agents to keep the customer conversion rate high?
• How can we create a community within the agent network to provide product information updates and support agency retention (such as Facebook or WhatsApp groups)?
• How can we set up the right operating model for providing cash to agents as needed?
• How can we make sure the agents have the right processes in place to ensure Go-for-Growth Bank’s cash is safeguarded?

This structure is quite exhaustive. Don’t worry if you didn’t have every bullet point in your structure. In practice, since you only have about 2 minutes to lay this out, you don’t need to write full questions on your piece of paper but only a couple of keywords for each bucket and each sub-bucket.

We recommend going through our article on Issue Trees to learn more about how to create a case structure.

After you lay out your case structure, your interviewer would prompt you to brainstorm which agents to acquire and which products and services to sell, so if you’ve already alluded to it in your structure, that gives you a headstart.

Here, your interviewer would hand you a few exhibits that detail population density by region, classification of the retail stores with metrics on annual revenue, footfall, etc., a list of Go-for-Growth Bank’s products and the associated profitability of each product, and the results of a survey that details the wishlist of financial services and products by underserved consumers and small businesses.

On brainstorming ideas, you’ll be rated on both your structure and your creativity. Make sure to always articulate the logic behind your ideas, using your past experience, analogies, or your general knowledge.

Ideas for Increasing Go-for-Growth Bank’s Revenue

• Target the agents that receive the highest customer footfall (grocery stores) AND/OR agents that are well-versed in handling legal/administrative documentation (postal outlets). Let’s assume the bank can cover 60% of the untapped population by acquiring grocery stores and postal outlets as agents in the Tier 2 cities.
• Sell products that are profitable to the bank and at the same time relevant to the customers (payment transfer, insurance products, working capital loans, home loans, etc.)
• Onboard agents as customers first to establish other customers’ trust in the bank’s products. Given it’s a less advanced economy where customers rely on heavy interactions with retail stores for information on financial products, word-of-mouth from the agent will establish trust upfront and lead to longer lifetime value (LTV) for the bank.

Ideas on Incentives for Agents

• Provide commission to agents of 0.15% on each insurance/loan product.
• Organize monthly or quarterly leagues with leaderboards to recognize top performers, e.g., highest transaction value, highest growth, highest customer acquisition, etc.
• Leverage social media to build an agent community via Facebook or WhatsApp groups. These groups can create engagement and serve as an efficient mode of communication, allowing the bank to solicit agent referrals and publish leaderboards.
• Introduce friendly competitions like “Best shop-front display” to increase the visibility of Go-for-Growth Bank’s products.
• Test if affiliation with the Bank’s brand in the country is a motivator for agents.

You could classify “high performers” as agents with transaction volume and transaction value in the top 10%. Agent’s potential information (e.g., footfall, turnover, location potential) can also be collected to have a more nuanced segmentation for tracking and governance purposes.

Running the Numbers on Go-for-Growth’s Agent Strategy

Finally, you should consider pressure testing the unit economics of each agent to ensure the bank’s targets are met. To do this, you’ll need to leverage the information you were provided during the opening of the case as well as make some assumptions. A quick way to round this up would be:

• Total # of customers = % of population targeted * Annual conversion rate per agent = 60% of population targeted * 10% conversion rate = 60% * (80% [% of population currently underserved by financial institutions] * 100 million [total population]) * 10% [conversion rate]= 4.8 million customers
• Revenue per customer = Avg # of banking products sold per customer * Annual price per product = 1.5 avg # of products * $500 price 1 = $750 annual revenue per customer.

1 Based on data from interviewer.

• Therefore, Topline impact = 4.8 million * $750 = $3600 million = $3.6 billion (validated as this meets the $3+ billion target)

Keep drawing on the interviewer to test the assumptions and/or ask for industry benchmarks on conversion rates, average number of products, prices, etc. to make your analysis rigorous.

A great candidate would also establish bottom line impact for the bank:

• Total bottom line opportunity = Topline opportunity * Profit margin = $3.6 billion * (5-7% profit margin – 0.15% cut to agents) = $175 to $250 million.

“Go-for-Growth Bank’s CEO walks into the team room and asks you about your findings. What do you tell her?”

You should lead with your recommendation to the client and detail the key reasons supporting that recommendation. Then, mention any risks to consider which might impact the outcome and the next steps that you’d suggest to double down on the analysis. There is no need to repeat everything you covered during the case: be succinct and stick to the key arguments.

What would you say? Give it a try before reading ahead.

“We recommend acquiring the grocery stores and postal outlets in the Tier-2 cities as agents for the bank to help sell loan and insurance products at a profit margin of 5-7% to retail and small business clients with a 0.15% cut to the agents. This way, we cover 60%+ of the underpenetrated population with our highest profitability products and provide an additional source of income to the agents at no additional cost to them. The high perceived value in being affiliated with the Go-for-Growth Bank brand will attract agent interest. This will allow us to add $3 billion to the top line and $175-$250 million to the bottom line annually.

One concern we’d like to address next is whether competitors could potentially take away our first-mover advantage by luring away agents with better commissions, especially in densely populous areas. We should address this potential problem with contract terms and incentives in our agent agreements.”

Congrats, you made it through your first financial services case interview!

4 Tips On Acing Your Financial Services Case Interview

1. validate corporate structure and business model.

Always remember to validate the corporate structure and business model of the financial institution in your financial services case interview. You don’t want to end up confusing a commercial bank with an investment bank!

As a candidate, you’re not expected to know everything. Therefore, ask as many questions as possible to understand what you’re really dealing with. For instance, you could say, “Hey, I’m not familiar with the corporate structure and the business model of a pension fund, could you please explain that to me so I can start to understand the drivers of value for the business a bit better.”

2. Align on the Success Metrics

To be able to reach your destination, you must know what the destination is. This is especially relevant in the financial services case interview, where there could be dozens of metrics that can be solved for. Therefore, it’s critical to align on the North Star with your interviewer so you can solve for the target the client cares most about.

3. Apply First-Principles Thinking to Structure the Case

To navigate through a financial services case interview, you need to think on your toes. Chances are the corporate structure, business model, regulatory environment, and risk aspects will be unfamiliar to you. Instead of feeling bogged down by these nuances, take a big picture lens and apply first-principles thinking to structure the case.

You may not know the industry terms such as “net interest margin” or “dividend-adjusted return,” but you can always ask the first-principles question on “What drives value for the business?” and engage with your interviewer to identify the underlying sources of value.

Demonstrating intellectual curiosity in financial services cases will hold you in good stead. Start with “Why?” then get to the “What?” and only then solve for “How?”

4. Remain Calm and Confident

It’s easy to lose nerve when you’re out of your comfort zone. If financial services case interviews tend to throw you off, practice staying calm while solving the case. During your practice, monitor yourself for signs of nervousness. Pause, take a deep breath, smile, and then continue solving the case. The more practice you put in, the calmer your nerves will become. Also, include elements such as reading financial news, financial statements, etc., into your case prep so that you become familiar with industry terminologies. Incorporating these habits into your holistic practice will boost your confidence naturally.

– – – – –

In this article, we’ve covered:

• Key differences between financial services firms and other firms,
• Common types of financial services case interviews,
• A financial services case interview example, and
• 4 tips on acing your financial services case interview.

Still have questions?

If you have more questions about financial services case interviews, leave them in the comments below. One of My Consulting Offer’s case coaches will answer them.

Other people prepping for consulting case interviews found the following pages helpful:

• Our Ultimate Guide to Case Interview Prep
• Issue Trees
• Market-sizing Case Interview
• Revenue Growth Case Interview
• Cost Reduction Case Interview
• Pricing Case Interview
• Supply Chain Case Interview

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Hacking the Case Interview

Although case interviews do not require any technical math or finance knowledge, there are basic formulas that you should know in order to do well in order to master case interview math .

This article will cover the 26 formulas you should know for case interviews. These formulas are organized into the following categories:

• Profit Formulas
• Investment Formulas
• Operations Formulas
• Market Share Formulas
• Accounting, Finance, and Economics Formulas

If you’re looking for a step-by-step shortcut to learn case interviews quickly, enroll in our case interview course . These insider strategies from a former Bain interviewer helped 30,000+ land consulting offers while saving hundreds of hours of prep time.

Profit Formulas for Case Interviews

1. Revenue = Quantity * Price

Revenue is the amount of money a company brings in from selling its products. This can be calculated by taking the number of units sold and multiplying it by the price per unit.

Example: Your company sells shirts for $20 each. Last year, your company sold 1,000 shirts. So, your total revenue last year was 1,000 * $20 = $20,000.

2. Total Variable Costs = Quantity * Variable Costs

Costs are payments that a company needs to make in order to run and operate its business. There are two different types of costs, variable costs and fixed costs.

Variable costs are costs that directly increase for each additional unit of product made. It represents the cost of raw materials needed to make the product.

Total variable costs are calculated by taking the number of units produced or sold and multiplying it by the raw material cost per product.

Example: It costs your company $5 to purchase the raw materials needed to make a shirt. If your company sold 1,000 shirts last year, the total variable costs are 1,000 * $5 = $5,000.

3. Costs = Total Variable Costs + Fixed Costs

Total costs for the company can be calculated by adding total variable costs and fixed costs.

Fixed costs are costs that do not directly increase for each additional unit of product made. They may include costs such as rent for the building or equipment needed to make the product.

Example: Your company pays annual rent of $10,000. It also leases the equipment it needs to make its shirts for $2,000 a year. Therefore, fixed costs are $10,000 + $2,000 = $12,000. Total variable costs were calculated to be $5,000 from the previous example. So, total costs are $12,000 + $5,000 = $17,000.

4. Profit = Revenue – Costs

Profit is the amount of money the company keeps after paying for all of its costs. Profit is calculated by subtracting total costs from total revenue.

Example: Last year, your shirt company generated revenues of $20,000 and had costs of $17,000. The profit last year was $20,000 - $17,000 = $3,000.

5. Profit = (Price – Variable Costs) * Quantity – Fixed Costs

This formula summarizes the previous four formulas into one concise and simplified equation.

6. Contribution Margin = Price – Variable Cost

Contribution margin represents how much money each product sold brings into the company after accounting for the cost of raw materials needed to make the product.

Example: If your company’s shirts sell for $20 and raw materials cost $5, then the contribution margin is $20 - $5 = $15 per shirt.

7. Profit Margin = Profit / Revenue

Profit margin represents the percentage of revenue that a company keeps as profit after taking into account all of its costs.

Example: Last year, your company generated $20,000 in revenue and had $17,000 in costs. Its profit was $3,000. Therefore, your company’s profit margin is $3,000 / $20,000 = 15%.

Investment Formulas for Case Interviews

8. Return on Investment = Profit / Investment Cost

Companies make investments by spending money in the hopes of earning even more money in the future as a result of the investment. Return on investment, or ROI for short, represents how much additional money a company generates relative to the size of its initial investment.

ROI is calculated by taking the profit that the company generated from the investment and dividing it by the investment cost.

Example: Your company spent $5,000 on marketing to advertise its shirts. As a result, the company generated an additional $6,000 in profits from selling shirts. This profit does not yet take into account the costs of the marketing campaign.  Therefore, the company has a net increase in profits of $1,000 from its original $5,000 investment. The ROI is $1,000 / $5,000 = 20%.

9. Payback Period = Investment Cost / Profit per Year

Payback period represents how long it would take a company to recoup the money it spent on an investment. It is usually specified in years.

Example: Your company invested in redesigning its shirts for $5,000. As a result, the company expects annual profits to increase by $1,000 for every year going forward. Therefore, the payback period for this investment is $5,000 / $1,000 = 5 years.

Operations Formulas for Case Interviews

10. Output = Rate * Time

The output of production can be calculated by taking the rate of production and multiplying it by time.

Example: The machine that your company uses to produce shirts can produce 5 shirts per hour. If the machine runs for 12 hours, then it will produce 60 shirts.

11. Utilization = Output / Maximum Output

Utilization represents how much a factory or machine is being used relative to its maximum possible output.

Example: The machine that your company uses to produce shirts can produce 5 shirts per hour. Therefore, its maximum capacity in a day is 5 shirts per hour * 24 hours = 120 shirts. If your machine is being used to only produce 60 shirts per day, then it is at 60 / 120 = 50% utilization.

Market Share Formulas for Case Interviews

12. Market Share = Company Revenue in the Market / Total Market Revenue

Market share measures the percentage of total market sales a particular company has. Market shares can range from 0%, no presence in the market, to 100%, complete dominance in the market.

Example: Your company sells shirts and generates $100M in annual revenues. The market size of shirts is $500M. Therefore, your company has a market share of $100M / $500M = 20%. 

13. Relative Market Share = Company Market Share / Largest Competitor’s Market Share

Relative market share compares a company’s market share to the largest competitor’s market share. It measures how strong of a presence a company has relative to the market leader. If the company is the market leader, relative market share measures how much of a lead they have over the next largest player.

Instead of using company market share and the largest competitor’s market share, you can use company revenue and the largest competitor’s revenue. This will give you the same answer.

Example: Your company has a 20% market share in the shirts market. Your largest competitor has a 50% market share. Therefore, your relative market share is 20% / 50% = 0.4.

Example 2: Your company is the market leader and has a 50% market share in the shirts market. Your largest competitor has a 25% market share. Therefore, your relative market share is 50% / 25% = 2.

Accounting, Finance, and Economics Formulas for Case Interviews

These formulas are much less commonly seen in case interviews than the previous formulas. You likely won’t need to use these formulas since they require more technical knowledge of accounting, finance, and economics.

However, you should still be familiar with these formulas in the small chance that one of these concepts shows up in your case interview.

14. Gross Profit = Sales – Cost of Goods Sold

Gross profit is a measure of how much money a company makes from selling its product after taking into account the costs associated with making and sellings its product. These costs are often called the cost of goods sold.

Compared to the previous profit formula, which was simply revenue minus costs, gross profit is always higher since it does not take into account all of the costs of the business.

Example: Your company sold $20,000 of shirts last year. The cost to produce these shirts was $5,000. Therefore, your gross profit is $20,000 - $5,000 = $15,000.

15. Operating Profit = Gross Profit – Operating Expenses – Depreciation – Amortization

Operating profit is calculated by taking gross profit and subtracting all operating expenses and depreciation and amortization.

Operating expenses may include rent, utilities, maintenance and repairs, advertising and marketing, insurance, and salaries and wages. So, operating profit is always less than gross profit.

Depreciation is the spreading of a fixed asset’s cost over its useful lifetime.

For example, let’s say that a company purchases a new machine for $10,000 that it expects to last for 5 years. Instead of stating that it incurred $10,000 in costs in its first year, the company may choose to state that the new machine costs $2,000 per year for the next five years.

Amortization is the spreading of an intangible asset’s cost over its useful lifetime. It is the exact same principle as depreciation except that it deals with intangible assets, or assets that aren’t physical.

For example, let’s say that a company purchases a patent for $10,000 and expects the benefits of the patent to last for 20 years. Instead of stating that it incurred $10,000 in costs in its first year, the company may choose to state that the patent costs $500 per year for the next twenty years.

Example: You sold $20,000 of shirts last year. Cost of goods is $5,000, operating expenses are $10,000, depreciation of a machine is $2,000, and amortization of a patent is $500. Therefore, your operating profit is $20,000 - $5,000 - $10,000 - $2,000 - $500 = $2,500.

16. Gross Profit Margin = Gross Profit / Revenue

This is the exact same formula as the profit margin formula except that gross profit is used. Gross profit margin measures how much money a company keeps from selling its products after taking into account cost of goods sold.

Example: Your company has a gross profit of $15,000 from $20,000 of revenue. Therefore, your gross profit margin is $15,000 / $20,000 = 75%.

17. Operating Profit Margin = Operating Profit / Revenue

This is the exact same formula as the profit margin formula except that operating profit is used. Operating profit margin measures how much money a company keeps from sellings its products after cost of goods sold, operating expenses, depreciation, and amortization is taken into account.

Example: Your company has an operating profit of $2,500 from $20,000 of revenue. Therefore, your operating profit margin is $2,500 / $20,000 = 12.5%.

18. EBITDA = Operating Profit + Depreciation + Amortization

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a financial metric used to measure a company’s cash flow or the amount of cash that a company has generated in a period of time.

To calculate EBITDA, start with operating profit and add back depreciation and amortization expenses.

Example: Your company has an annual operating profit of $2,500. Depreciation expenses are $2,000 and amortization expenses are $500. Therefore, your EBITDA is $2,500 + $2,000 + $500 = $5,000.

19. CAGR = (Ending Value / Beginning Value)^(1/Time Period) – 1

CAGR stands for compounded annual growth rate. It measures how quickly something is growing year after year.

Example: Your company generates $144M in annual revenue. Two years ago, your company only generated $100M. Over this time period, your CAGR was ($144M / $100M)^(1/2) - 1= 20%. In other words, your company grew by 20% each year for two years.

20. Rule of 72

The Rule of 72 is a shortcut used to estimate how long a market, company, or investment would take to double in size. To use it, simply divide 72 by the annual growth rate to get an estimate for the number of years needed to double in size.

Example: Your company is growing steadily at 9% per year. Using the Rule of 72, we’d expect it to take 72 / 9 = 8 years for your company to double in size if it maintains its current growth rate.

21. NPV = Cash Flow / [(1 + Discount Rate)^(Time Period)]

NPV stands for net present value. It measures how much future cash flow is worth today.

Receiving $1,000 right now is not the same as receiving $1,000 five years from now. If you received $1,000 right now, you could invest it and grow your money. Therefore, it is better to receive $1,000 right now than to receive the same amount in the future.

Net present value takes this into account.

Cash flow is the amount of money you expect to receive in the future. Time period is how many years in the future you will receive that amount of money. The discount rate is the return you expect to get from investing your money.

Example: You expect to receive $1,000 five years from now. You expect that you will be able to get 8% annual returns by investing in the stock market. Therefore, the net present value of your future cash flow is $1,000 / [(1 + 0.08)^5] = $680.58.  In other words, receiving $680.58 today would give you the same value as receiving $1,000 five years from now.

22. Perpetuity Formula: Present Value = Cash Flow / Discount Rate

An annuity is a fixed sum of money paid at regular intervals such as every year. Perpetuity is an annuity that lasts forever.

The present value of a perpetuity is calculated by taking the cash flow of each payment and dividing it by the discount rate.

Example: You are expecting to receive $1,000 per year for the rest of your life. You expect that you will be able to get 8% annual returns by investing in the stock market. Therefore, the present value of this perpetuity is $1,000 / 0.08 = $12,500.  In other words, receiving $12,500 today would give you the same value as receiving $1,000 each year for the rest of your life.

23. Return on Equity = Profit / Shareholder Equity

Return on equity , or ROE for shirt, measures how effectively a company is using its assets to create profits. It is calculated by taking profit and dividing by shareholder equity, which represents the net worth of a company.

In other words, shareholder equity is the value of a company’s total assets minus its total liabilities.

Example: Your company’s profit this year is $100M. Shareholder equity, or the net worth of the company is $1B. Your company has a ROE of $100M / $1B = 10%.

24. Return on Assets = Profit / Total Assets

Return on assets , or ROA for short, measures how profitable a company is relative to its total assets. In other words, it shows how efficiently a company is using its assets to generate income.

Assets can be anything that has value that can be converted into cash. This includes cash, property, equipment, inventory, and investments.

Example: Your company’s profit this year is $100M. Your company as $400M worth of assets. Your company has a ROA of $100M / $400M = 25%.

25. Price Elasticity of Demand = (% Change in Quantity) / (% Change in Price)

Elasticity is a measure of how much customer demand changes for a product given a change in the product’s price. In almost all cases, an increase in a product’s price results in a decrease in customer demand. Therefore, price elasticity of demand is usually negative.

Example: Your company has decreased its product’s price by 10%. As a result, the number of units sold has increased by 20%. Therefore, the price elasticity of demand is 20% / -10% = -2.

26. Cross Elasticity of Demand = (% Change in Quantity for Good #1) / (% Change in Price for Good #2)

Cross elasticity of demand measures how much customer demand changes for a product given a change in price of a different product.

If two products are complements, an increase in price of one product will result in a decrease in demand of the other product. Complementary products have a negative cross elasticity of demand.

If two products are substitutes, an increase in price of one product will result in an increase in demand of the other product. Substitute products have a positive cross elasticity of demand.

Example: A competitor has decreased the price of a competing product by 20%. As a result, the demand for your product has dropped by 10%. The cross elasticity of demand is -10% / -20% = 0.5.

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Finance Case Study Example | Finance Interview Technical Questions

Written by abc audio all rights reserved on february 23, 2022.

My Communities: ► Email list: http://bit.ly/joinericnewsletter ► Discord: https://discord.gg/gHghhVcW3S

Related Financial Modeling Videos: ► Finance Interview Prep Series | Crush Your Interview: http://bit.ly/fin_intervw_prep ► Build a 3 Statement Financial Model: https://youtu.be/xlXDZyZ9azk ► Demystifying the Cash Flow Statement: https://youtu.be/BS6_RsuqzwE ____________________________________________

One of the quickest and most common ways to evaluate candidates for analyst roles is to give them a finance case study during an interview. Case studies force us to both crunch the numbers quantitatively to demonstrate our knowledge but also think about the big picture and make recommendations – they are a lot of fun!

For these reasons, they are common in technical finance interviews, university projects, MBA programs, etc.

In this video, I help you solve a finance interview case study for a software platform that is considering a revenue share partnership with another company – this is the type of case study would be common at a FAANG or big tech company.

All case studies start the same way – they present you with a set of facts during some pivotal moment at a company where they are trying to decide whether they want to do some new thing (be it internally, or externally).

Regardless of the specifics – all case studies in finance are effectively asking you to do the same thing – build a simple income statement, differentiate COGS vs. OPEX expenses, calculate the depreciation for a CAPEX investment, and evaluate cash vs. accrual accounting payback period.

At the end, you are expected to synthesize your analysis into an open-ended recommendation about what the company should do.

Now that you understand the basic format of finance case studies, let’s walk through this example where I help you develop a framework of ideas to analyze situations with.

1:04 finance case study model setup (all case studies are basically asking the same info) 3:55 building the income statement & analyzing margins 10:50 calculating depreciation schedule for CAPEX 16:15 cash flow analysis & payback period vs. p&l 18:12 key quantitative metrics for making a case study recommendation 21:10 key qualitative metrics for making a case study recommendation 24:36 my finance case study recommendation

By the end of this video, you will understand how to approach finance case studies, crunch the numbers, and make recommendations in your future interviews – I guarantee it!

If you have questions – please leave a comment below and I’ll try to help. Cheers!

► Subscribe for more finance videos: https://bit.ly/EricAndrewsSubscribe

#financecasestudy #financeinterviews #saas

The post Finance Case Study Example | Finance Interview Technical Questions appeared first on Correct Success .

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Case interviews: what finance concepts do I need to know?

Consultants use a wide range of financial concepts on their projects. Case interviews reflect real life examples and you will therefore come across financial concepts when you interview. These concepts range from fairly basic (E.g.: fixed costs) to more advanced (E.g.: return on investment).

The difficulty is that there is an endless list of financial concepts you could learn. But you do not have time to learn and master all of them and doing so should not be the objective of your preparation.

When you prepare for case interviews , you therefore need to ask yourself the following key question: What are the financial concepts I need to master to ace case interviews?

Click here to practise 1-on-1 with MBB ex-interviewers

The answer depends on the position you are applying for. In this blog post, we assume that you are interviewing for a general consultant, associate or manager role at a typical strategy firm (E.g.: McKinsey, BCG, Bain, etc). If you apply specifically to the financial services practice of the firms above, you will need to know more advanced financial concepts than we list below. But for general positions, here is the list of financial concepts you need to master:

• Fixed and variable costs

More advanced

• Return on investment
• Payback period

There is a very small chance that you might come across more exotic financial concepts in your case interviews. But in these cases you will not be expected to know the concept at hand. Instead, your interviewer will expect you to ask clarifying questions about the concept and will help you understand it.

There are three reasons why you do not need to know more financial concepts than the ones listed above:

• First, in our experience, these concepts will enable you to tackle 99% of the cases you will come across in your interviews
• Second, learning more concepts than this would be very time consuming. Instead you should use your time practicing on real case interviews
• Third, consultants themselves usually do not know more financial concepts than the ones we have listed. As a consequence if a more advanced concept is required for your case it is almost certain that your interviewer will help you understand it

Let us now define the concepts you need to know one by one.

We’ve already defined some basic financial concepts the video below. While McKinsey no longer uses the PST, these concepts are still useful to review.

Revenues, sales, or turnover (the three terms are synonyms) are the total amount of money that the company receives from customers by selling its products.

Let’s take an example. Imagine you work for an airline, such as British Airways. You sell plane tickets to your customers. The total amount of money you collect from customers in exchange for plane tickets (and any additional services you provide) is your company’s revenues.

There are two main ways you could be asked to calculate revenues for a company:

You might be given the number of products the company sold (the volume) and the average price of the products. From this, you can obtain revenues using the following formula: Revenues = Volume x Average Price.

Alternatively, you could be given the total sales in an industry (total market sales), and the share of the industry’s revenues represented by the company (the market share). The company’s sales would then be given by: Revenues = Total Market Sales x Market Share.

Either way, remember that revenues or sales are measured in terms of money (Dollar, Pound Sterling, Euro, etc.).

Costs, or expenses, are the total amount of money that the company pays to its various suppliers. In the case of the airline above, this will be the money that the company pays for fuel, leasing airplanes, the salaries of the crew, as well as expenses such as the cost of running their headquarters, their website, or even taxes and interest on loans.

As you can see, the term ‘costs’ covers many different items. Companies will be interested in tracking costs closely.

Fixed and variable costs: Businesses incur two types of costs. Variable costs are the costs that increase with higher sales or higher production. Fixed costs are the costs that would have to be paid regardless of how much is produced. In other words, variable costs change with the level of business activity, while fixed costs don’t.

Let’s imagine you are the CEO of a handbag manufacturer. The cost of the material you use to manufacture the bags is a variable cost: the more bags you produce, the more leather you will need. If one day you produce no handbag, then you don’t have to pay for any extra material. By contrast, the rent you pay for the store has to be paid every month, regardless of whether you sell or produce any bags that month.

As you may already appreciate, the distinction between fixed and variable costs is not always straightforward. For instance, labour costs can be either fixed or variable. As a CEO, your salary is a fixed cost as it will be paid independently of how many bags the company produces. However, during periods of peak production you might hire extra workers at your factory and their salary will therefore be a variable cost.

Even though these difficulties might arise, your interviewer will always allow you to determine easily from the context which cost is fixed and which is variable.

The most important relationship in business analysis is probably the following:

Profits = Revenues – Costs

Profits, also known as net income or net earnings, represents the money left to the owners or managers of the business after all expenses have been paid. Many questions in case interviews revolve around whether or not a company is profitable and what it should do to become more profitable.

Profits are always calculated over a certain period of time – either a quarter or a full year. If you are given fixed and variable costs, you would first have to calculate total costs over the period of time studied, before being able to calculate profits. For instance, in our handbag manufacturing example you would take all fixed costs for one year and add all variable costs for the production of that year to calculate total costs. Annual profits would then be given by subtracting total costs from annual revenues.

Given this definition of profits, there are two ways companies can increase their profits: increase revenues, or decrease costs. You can also see why it might not always be completely straightforward to compare the performance of two companies: one might have higher revenues but higher costs than the other.

4. Return on investment

Return on investment (ROI), or return on capital invested (ROCI), measures how much profits are generated by $100 invested in a given project or business. Let’s say you set up a lemonade stand with an initial investment of $1,000 to pay for a stand, a lemon press, etc. Let’s now assume that you sell $500 worth of lemonade throughout the year and that you incurred $400 in costs to make those sales (E.g.: lemons, sugar, electricity, etc). Your profit for the year is $100 and your return on investment is $100 / $1,000 = 10%.

The formula for return on investment is therefore given by:

Return on investment = Profits over given period / Initial investment

Returns on investment are expressed in percentages and calculated over a given period of time, usually one year. But nothing prevents you from calculating a daily or monthly return on investment. To do so, you just need to divide a day’s worth of profits or a month’s worth of profits by the initial investment. For a given project, profits made in a day are lower than profits made in a month or year, and the daily return on investment is therefore lower. In our example, assuming we make $100 / 365 = $0.27 of profits in a day, the daily return on investment is $0.27 / $1,000 = 0.027% which is lower than 10%.

Let’s focus on the initial investment part of the equation. In your case interviews , you will most likely have to calculate ROIs when a company is investing in a new project. Here, the initial investment will be the upfront expenses the company needs to make to start the business. For instance, if the company wants to start producing cars, building the car factory will be the main initial investment. Similarly, if the company wants to start a supermarket, the main initial investment will be the building, fridges and shelves to set up the supermarket (assuming it buys the building). Initial investments are typically only incurred once, at the beginning of the project.

Finally, there are two ways to increase ROIs: growing profits or decreasing the initial investment. Sometimes, the return on investment for a project will be negative. This indicates that profits are negative and that the project is losing money.

5. Payback period

Payback period measures how much time it takes to earn back your initial investment. In our lemonade stand example, it takes 10 years of profits at $100 per year to pay back the initial investment of $1,000. The payback period is 10 years.

The formula for payback period is therefore given by:

Payback period = Initial investment / Profits over a given period

Payback periods are usually expressed in years by dividing the initial investment by the profits per year . But notice that they can also be expressed in days or months too simply by dividing the initial investment by the profits per day or the profits per month .

Finally, notice that the payback period is simply the inverse of the return on investment. In our lemonade stand example, the yearly return on investment was 10%. To calculate the payback period we could have simply done 1 / 10% = 10 years. Again, in some cases the payback period will be negative which indicates negative profits and that the project is losing money.

Mock interviews

The best way to improve at case interviews is to practise interviewing out loud, and you can do that in three main ways:

• Interview yourself (out loud)
• Practise interviewing with friends or family
• Practise interviewing with ex-interviewers

Practising by yourself is a great way to get started, and can help you get more comfortable with the flow of a case interview. However, this type of practice won’t prepare you for realistic interview conditions. 

After getting some practice on your own, you should find someone who can do a mock interview with you, like a friend or family member.

We’d also recommend that you practise 1-1 with ex-interviewers from top consulting firms . This is the best way to replicate the conditions of a real case interview, and to get feedback from someone who understands the process extremely well.

Click here to book your mock case interview.

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Case interview pwc (financial services - transaction services).

My name is Marco and I am currently appyling for an internship (6 months) at PwC in Financial Services (within Transaction Services). I already had an online assessment and I have now been invited for an interview (Frankfurt) in about a weeks time. On the phone the recruiter told me, that I had to expect a case study and a "regular" interview with partners/senior managers of the team I am applying to.

It's my first interview of this type and I wanted to ask you: What kind of case study could I expect? What could it be about and how do I approach (suggestions or links very much appreciated).

Thanks a lot

Overview of answers

• Date ascending
• Date descending

PwC Corporate Finance Technical Case

Corporate finance interviews are different from consulting and are usually much more technical and detailed in financial part. Usually, they give you much more time to prepare and do the model on paper. Depending on the company you'll need to:

• Find the relevant information in P&L, Balance sheet, CF statement
• Do the simplified valuation using NPV: calculate cash flows and make assumptions about growth rate and discount rate
• Do the valuation using comps - you'll have to explain which comps you will use and why
• Do the valuation of the synergies
• Play with different scenarios (e.g. how the stock-price will change if the deal terms leak into media, or how should the companies behave in a bidding process)

There are two types of frameworks you may use:

• Commercial due-diligence of the target company
• Synergies calculation of two merging companies

Note also that it can be a mix of both.

1. For Due Diligence you can use the following structure:

• Growth rates
• Profitability
• Distribution channels

Competition

• Market shares of competitors and their segments (see the next point)
• Concentration / fragmentation (Fragmented market with lots of small players is less mature and easier to enter from a scratch. Concentrated market is hard to enter but has potential acquisition targets)
• Unit economics of the players (Margins, relative cost position)
• Key capabilities of the players (e.g. suppliers, assets, IP, etc)
• Unit economics (Margins, costs) in current or target markets
• Product mix
• Key capabilities

Feasibility of exit (in case of a PE company) :

• Exit multiples
• Existence of buyers

2. For Synergies Calculation you can use the following structure:

• Revenue synergies - here you calculate the synergies in price and quantity (depending on the case it may be new geographies, new products, new distribution channels, bigger share on shelves crosselling opportunities, etc.)
• Cost synergies - typically you use a value chain structure tailored to the industry (e.g. supply-production-distribution-marketing-after sales support)
• Financial synergies - working capital, capital structure, tax
• Risks - major risks that can decrease the synergies (tip: don't underestimate the merging companies culture factor)
• Total synergies potential in $, adjusted by risk (probability of failure)

While the b asic consulting services have mainly classic cases (Market sizing, profitability, market situation, etc), f inancial consulting may have specialized cases as well. For example, Transaction has M&A cases (Basic accounting, Due diligence, calculating NPV on paper, calculating Stock basis and earnings & profits, etc).

The cases will be much more detailed in financial part . Depending on the company you'll need to:

• Find the relevant information in P&L and Balance sheet
• Calculate the share splits and price per share

I recommend finding someone from that practice and check the details of the interview in the particular department

Here are some good frameworks you may use:

1. For commercial DD you can use the following structure:

Feasibility of exit :

• Financial s ynergies - access to capital, restructuring, etc

Congratulations on reaching the interview stage with PwC! Having been there myself I am happy to share some insights. In a case study for an internship in Transaction Services, you might encounter a scenario related to financial analysis, valuation, or due diligence. Warm regards, Frederic 

Understand the Basics:

• Brush up on fundamental financial concepts: financial statements, valuation methods, and accounting principles.

Case Study Format:

• The case might involve analyzing financial statements, assessing investment opportunities, or conducting due diligence on a company.

Industry Research:

• Familiarize yourself with the financial services industry, especially transaction-related activities.

Practice Financial Modeling:

• Practice creating a simple financial model. Focus on forecasting, valuation, and cash flow analysis.

Review Previous Transactions:

• Look into recent mergers or acquisitions in the financial services sector. Understand the financial implications and rationales behind these transactions.

Problem-Solving Approach:

• Break down the case into manageable components.
• Clearly articulate your thought process and assumptions.
• Be ready to discuss the implications of your analysis.

Communication Skills:

• Practice presenting your findings in a clear and concise manner.
• Be prepared to discuss your reasoning with the interviewers.

There are a few set of questions, which you might be asked:

CV questions. Walk me through your resume OR tell me about yourself.

Why did you choose your university?

Why did you choose your faculty?

How you showed your social activity, and why this exactly?

Why do you have these hobbies? 2. Motivational questions are designed to understand your internal drivers to be a consultant

Why consulting?

Why this region?

Why X firm? 3. Behavioral questions

by being prepared for this kind of questions, you can crack similar questions in any other company:

The Entrepreneurial Drive / Drive and Achieving Question

The Personal Impact / Persuasion / Conflict Resolution Question

The Leadership / Teamwork Question

Regarding the case-solving, Here is a good preplounge article:

https://www.preplounge.com/en/bootcamp.php/interview-first-aid/crack-the-case-interview/approaching-a-case

Start by studying this one but don't waste your time studying plain theory because case solving is all about PRACTICE.

Here are some cases you might want to check out:

For Beginner level:  

Laundry Chain - Revenue Increase 

https://www.preplounge.com/en/management-consulting-cases/interviewer-led-mckinsey-style/beginner/laundry-chain-revenue-increase-215

Launching Caskets in North Africa

https://www.preplounge.com/en/management-consulting-cases/interviewer-led-mckinsey-style/beginner/launching-caskets-in-north-africa-1st-round-bain-case-225

For Intermediate level:

Grain Co-operative – Brand Launch

https://www.preplounge.com/en/management-consulting-cases/interviewer-led-mckinsey-style/intermediate/grain-co-operative-brand-launch-217

Case with a twist: Chinese Alloy Wheels – US Market Entry

https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/intermediate/case-with-a-twist-chinese-alloy-wheels-us-market-entry-226

I suggest you start with the intermediate level after you are confident with the beginner ones.

Hope it was helpful,

i came across your post and i just want to know what Kind of questions did you had at the online test and how do you prepare for it

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MBB Final Round Case - Smart Education

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leveraged finance interview - what to prep

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I'm an undergrad and have a lev fin interview this week and was wondering what the key topics and technicals i should prepare for are? are there any specific things related to this field you believe are common to get asked about in an interview?

For sure know the basics of bonds, yield curves, pricing and interest drivers, and have an opinion on both the fixed income markets and equities markets. Know the characteristics and structure of debt (senior, junior, mezz, equity). It's less likely, but they might ask you about debt schedules/ waterfalls so you might want to review that as well.

Know the difference between investment grade bonds and high yield bonds. The ultimate goal of LevFin is to provide clients with an optimal capital structure to help the client achieve their goals in the best manner. Whether a merger , acquisition, or capital injection. Good luck with the interview!

California t: Hi all, I'm an undergrad and have a lev fin interview this week and was wondering what the key topics and technicals i should prepare for are? are there any specific things related to this field you believe are common to get asked about in an interview? thanks

Check out A Pragmatist's Guide to Leveraged Finance: Credit Analysis for Bonds and Bank Debt. Good luck. If you can't get hold of the book there is a summary somewhere online on scrib if i remember.

The most important aspect will be credit analysis and how to assess a company's debt capacity, knowledge of the yield curve / markets etc is less important as long as you have a sensible view on the market. Chapters 4 and 5 in Rosenbaum & Pearl are great primers on Lev Fin and LBO modelling. Read these 2 chapters thoroughly (PDF available of the book online) and you'll be well prepared. Reading S&P's primer on leveraged loans ( http://www.leveragedloan.com/primer/ ) will also be a worthwhile exercise. People often overlook the loan element of the market when preparing for interviews. If you're interviewing for a MM firm, read up on BDCs / direct lending funds, as they are continuing to grow in stature and compete with IBs for MM deals.

LevFin 1st year Analyst Interview-LBO? ( Originally Posted: 01/17/2014 )

Obviously I should be prepared for anything, but do you think they would make me lbo model a company as someone interviewing for a 1st year analyst?

They can ask you anything about debt. I used these site to prepare. Good luck

http://www.leveragedloan.com/primer/#!what-are-leveraged-loans-used-for

Wow these are great. Any other resources would be greatly appreciated.

I interviewed once with a LevFin group that gave me a case study which involved a simple FCF model. More important was the analysis of the business on whether or not it would make a good leveraged loan investment.

Wow- I feel like I'd be slightly stumped on that. Was it a BB by any chance? Also, did they ask key ratio questions such as coverage ratios, etc.

You need a growth rate...A start up would have most of its assets as "growth assets"

Are there comparable firms?

gets difficult when you only have one sales figure. after all, you don't even know whether the company is profitable (or planning to be in the near future). you sure never know this when valuing a startup, but having more figures lets you build decent proxies....

Lateral Levfin interviews ( Originally Posted: 02/13/2017 )

Hey Guys, I have just finished by first year in a cb group at a large euro bank now looking to lateral to LevFin. I was wondering if anyone has had experience interviewing at the "Experienced analyst" level for levfin at any of the BBs . I am curious to how difficult interviews can be at level? I have a solid grasp on the mechanics of an LBO but dont think I could explain tiny details orally yet. Any input or experience with this move?

Make sure you know your shit inside out. They will test your skills and your ability to do the job from day 1.

I figured so. Will technicals be just geared around LBOs?

Corp/Lev Finance IBD Interview Question Prep ( Originally Posted: 10/06/2016 )

Hey guys. I have an investment banking superday with a BB next week in Oil & Gas. However, through my first two rounds, and through speaking with people who have done this process in the past, they are very technical, especially with Corp/Leverage finance questions regarding debt/equity issuance and whatnot. I was wondering if anyone had resources or sample questions to help me prepare.

Examples of Questions - "Why would a company issue notes at a 3% discount to face value" "How could a company raise more debt without increasing interest payments" (I can't recall the question. It was something like this, and the answer was "Either going to FOREX (USA) market, or negotiating new debt covenants)"

Given the questions you provided I think you'll be fine with the respective chapters of the breaking into wallstreet guide and with the debt related chapters of the Rosenbaum book

BofAML LevFin Interview ( Originally Posted: 12/21/2012 )

Have a first round phone interview for BofAML SA in LevFin coming up soon. Any advice on what to expect? Fit vs technical? Any advice would be greatly appreciated.

all fit cept a few questions about why you're interested in debt

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Corporate Development Interview Prep

We Give You BOTH Coaching and Top Quality Interview Prep Guides, Slides, Financial Models, and Case Studies for Corporate Development - Our 93% Success Rate Speaks For Itself

Corporate development has been a popular area to transition to for many finance professionals; the broad variety of factors such as mergers and acquisitions, corporate strategy and work-life balance are attractive to many. Traditionally, corporate development hired primarily investment bankers and management consultants, similar to private equity. Fortunately, demand has never been higher for corporate development as mergers and acquisitions and roll-ups are executed at a breakneck pace, and more and more firms are also hiring candidates from non-traditional backgrounds.

Corporate development interviews typically involve 3 to 4 rounds, and usually include a case study that tests your financial modeling capabilities. They also look for professionals who have strong abilities in corporate strategy and value creation, and would thrive well in a corporate environment.

We can help you prepare for the case study by walking you through similar case studies and testing you on case studies in a variety of industries. We will also build upon existing financial modeling concepts, teach you how to walk an interviewer through a model, and help you both ask and answer the right questions from our curated list of corporate development interview questions, both technical and fit.

• Build a story that aligns your experiences with the needs of corporate M&A and strategy
• Teach you the strategic elements of corporate development, such as factors to consider before entering a new market, how to account for scale, etc.
• Help you master case studies that are more focused on operational modeling
• Analyze and build upon the various valuation methods used in corporate M&A such as precedent transactions, DCFs, accretion / dilution analysis, and LBOs
• 93% of clients receive a job offer in corporate development. We are the only service completely dedicated to your success. Our philosophy is unique: a successful client is one who gets the job of their dreams, NOT one who keeps coming back!

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• Complex LBO case study in software industry with quarterly modeling required and working with ownership waterfall structures like liquidation preference
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• Short LBO case study in restaurant industry
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Josh Jia (IB, PE, and Corporate Development)

• 8 years of experience
• Founded Limestone Capital
• Private Equity Analyst at Imperial Capital
• Investment Banking Analyst at BMO, Diversified Group
• Placed 100+ candidates into finance roles

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• 4 years of experience
• Corporate Banking Associate at BMO
• Focused on P&U and infrastructure
• Investment management and trading experience
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What our clients are saying:

Josh greatly assisted me in preparing for my Bain, BCG and McKinsey interviews. He helped to curate interviews that developed my weaknesses and helped me to identify my strengths. His cases were through, creative and challenging. Our cases were broadly focused at first but Josh was able to identify the places I needed to improve in order to advance. Josh's feedback was an asset to my improvement in the case interview circuit. He's an intelligent and highly driven finance professional who greatly assisted in achieving my interview goals and I'm confident he can do the same for you.

Management Consulting Professional

Josh has been invaluable in helping me improve my financial modeling skills and sharpen my understanding of material details in private equity transactions. Josh is a great teacher and is able to effectively communicate and pass on his experience and knowledge gained as an investment banker and private equity professional. Josh does not only teach the basics but can readily break down and simplify complex industry concepts. Josh was not only great in teaching the technical aspects of the job but also helped to develop my strategy to succeed in interviews. Overall, I am Josh has been outstanding in helping me transition from a non-traditional background in corporate law to finance.

Investment Banking Associate

Joshua Jia is probably one of the most knowledgeable and hardworking professionals you will ever meet. He has immense industry experience and also significant knowledge of the finance industry in general. I have benefited immensely through Josh’s help throughout the job searching and recruiting process in the finance industry and have landed a number of sought after roles. I hope that you will be able to benefit from this as well. Josh’s help will not only open doors for now, it will also open doors for your future career opportunities. The investment is well worthwhile.

Corporate Finance Professional

Josh is a leader in interview preparation and career development. Josh was instrumental in helping me land a job at a leading global investment bank in NYC. Josh continues to be a source of guidance and mentorship as I progress through my career. I highly recommend working with Josh to secure your next job in the financial industry.

Investment Banking Associate at Global Investment Bank in NYC

Josh greatly assisted me in preparing for my interviews in both investment banking and corporate development. He provided me with practical, actionable advice drawn from his experience interviewing with numerous employers that helped me overcome my weaknesses, highlight my strengths and tailor my message to the employer in question. He was incredibly patient with me as I went through the interview process and was very helpful throughout. If you're looking for someone to transform your interview skills, there is no better person than Josh.

Corporate Development Professional at Multinational Corporation

Josh has been a phenomenal mentor of mine since I was in first-year university. His extensive experience in investment banking and private equity made him the perfect interview prep coach, especially since he has gone through the recruiting process himself. In addition, he has a knack for giving intuitive explanations for financial concepts, ensuring that I fully understood the theory as opposed to simply memorizing the answers to a list of interview questions. His friendly disposition also made him a pleasure to interact with. In the end, I was able to secure an investment analyst position on the buy-side upon graduation. I definitely would not have been able to get there without his help, so many thanks to Josh for helping me jumpstart my career!

Investment Analyst at Leading Investment Management Firm

Josh’s personal advice were essential for me when I was looking for a job. His experiences and expertise in the finance industry allowed him to teach me some of the most practical and useful financial concepts. Moreover, Josh international experiences also helped me to explore different opportunities in regions like China and Hong Kong. Josh was very attentive throughout the whole process. He helped to improve my resume tremendously by cutting out the unnecessary materials and highlighting personal strength. Most importantly, his deep understanding of interviewers’ intentions was what really helped me. By the end of my sessions with Josh, I was not only able to receive job offers, I also gained knowledge about the industry which I believe that will able to benefit me for a lifetime.

Private Equity Associate

Josh was incredibly helpful when it came to prepping for interviews. Whether he was giving me advice technical or behavioural questions, everything he helped me with was instrumental in helping me get a job in investment banking, and then in private equity. If your goal is to break into the industry, there’s no one I would trust more than him!

Alex and Josh are both great mentors and were a crucial component of my career development early on, and the guidance they provided me on financial modeling and LBO modeling gave me a step up in both recruiting and work. They are both extremely competent with regards to teaching financial concepts for individuals both new and familiar with finance, and are always happy to share honest advice. They are both genuinely care about your success and I would recommend them to anyone interested in developing the necessary skills to pursuing a career in finance early on.

Investment Analyst at Highbridge Capital

I just wanted to take the time to thank and give much-deserved credit to Alexander. My resume review could not have gone better. Alexander was thorough and asked all the right questions in order to capture all of my highlights. He took the time to fully understand my story and position it in the best way on my resume. His knowledge of the Finance industry was evident in his suggestions which I would have never thought of. He also took the time to answer any miscellaneous questions I had in detail. The process was outstanding all around. I would definitely work with him again and recommend this service to anyone looking to transform their resume.

Sr. Finance Manager, ABB Optical Group (Florida)

Alex did a great job on my resume review. He was encouraging and offered perspective that increased my confidence with the job search. I was changing industries and was concerned I wouldn’t be able to break into investment banking, but through his encouragement and help I was able to get an investment banking analyst position within a few weeks. I received many compliments on my resume through the job search which played a huge part in me receiving the offer. I would recommend Alex’s service for any student or professional wanting to get into investment banking.

Investment Banking Analyst, Agentis (Vancouver)

Alexander was immensely helpful in getting my resume ready for my recent career search. He was extremely thoughtful, attentive, and helpful throughout our interaction. With his help I have been able to secure interviews with firms that I would not have been able to prior to him helping me refine my resume.

Analyst (Originations), White Oak Global Advisors (San Francisco)

My experience with Alexander has been more than pleasant. Alex was prompt, courteous and professional. He took the time to talk to me to truly understand my work experience and my skills. He reformatted my resume, condensed it down to 1 page while preserving the essence. He also helped me with my interview skills, potential areas I could improve on. I have received several interviews from high caliber organizations, and I attribute it all to Alexander's help.

Analyst (Data Performance & Risk), Alberta Teachers’ Retirement Fund Board (Edmonton)

It was 8 months before graduation that I decided to pursue a career in finance. Having worked in completely irrelevant fields, I was lost and I didn't have any guidance or exposure to the whole finance scene and struggled in figuring out how to break into finance. I knew speaking with people like Alexander who knew ins and outs of recruiting process was one of the things I could do, so I actively sought mentorship opportunities, and I stumbled upon a chance to speak with Alexander. After speaking with him and doing a mock interview, I learned exactly what I lacked in, and what strengths I have, and what direction I should take on to maximize my chances of breaking into the industry. Alexander has been tremendously helpful with my recruiting, and offered invaluable advice that played a critical role in landing interviews with reputable firms for investment banking, equity research and private equity roles. What I really appreciated was that he was very real and gave advice that were actionable in the very limited timeframe I was given. Alexander is currently mentoring me and I truly feel that having a mentorship opportunity with Alexander will help anyone aspiring to be in finance to set out a clear plan that he or she can execute on.

Private Equity Analyst, Red Oak Succession Partners (Toronto)

I had the pleasure of working with Alexander when he conducted a resume review session with me prior to the beginning of the recruiting season. One of the things that stood out to me about the session was how thorough Alexander was with his feedback. My resume was not riddled with too many errors, but Alexander provided constructive feedback for almost every line of my resume. Not only was he able to give feedback on the resume itself but also he provided his thoughts about how he felt my resume was as it relates to the roles that I intended to apply for. I'm currently in the process of recruiting and now feel more confident about my resume and have begun to receive interview opportunities for the roles that I intended to apply for.

Student, Baruch College

Alex recently helped me with my resume. The process began with a bunch of pertinent questions which formed a starting point for the review and then continued with revisions based on subsequent questions I had following the first draft. The resume looks significantly better than what I had before this process. I also learned that I was leaving off things that were perfectly good to be on the resume and stay there. Additionally, Alex was kind enough to take the time to answer some other questions I had, given his experience in the field. Overall, the process was seamless and informative and I highly recommend it if you are at all uncertain about your resume.

Senior Financial Analyst, Avenue M Advisors (Los Angeles)

Alex has the ability to hone in on specific aspects of your resume and make them shine. After a phone call and a couple pass-throughs with him, the difference in my resume is night and day. Always friendly and receptive, Alex has managed to make me impressed with my own resume. I’m heading into recruiting season more confident than ever and looking forward to staying in touch with Alex.

Marketing Manager, Xiaomi (Beijing)

Alexander provided superior service in helping me revise and critique my resume. Throughout the resume review process Alexander provided thorough and concise feedback to ensure my resume was of the highest quality to present to employers. Overall, the resume review service offered by Alexander was very professional and highly recommended!

Loan Associate, State Street (Boston)

From the moment Alexander Banh and I connected he was very professional and quick to respond to me. He offered to review my resume and give it a professional update so that I would attract more potential employers to my profile. He did a superb job with sending me a thorough questionnaire to learn more about me and my previous work experience which thus led to him generating a very polished resume for me. The process took less than a week and I was very pleased with his work. After he was done working on my resume I immediately starting filling out applications for finance positions that I was interested in. I received many call backs and in person interviews, which led me to receiving a full time job in corporate finance for a company that I love working for. I know that I wouldn’t be where I am today without his help. Thank you again Alexander, and I look forward to working with you in the future.

Wealth Mgmt. Branch Analyst, Morgan Stanley (Atlanta)

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After understanding your goals and background, provide you with sample mock interview questions to ascertain where you are at in your preparation

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9 of the Biggest Financial Fraud Cases in History

Financial fraud is on the rise, so it's worth taking a trip down a dark memory lane.

9 Biggest Financial Fraud Cases

The criminal trial of FTX founder Sam Bankman-Fried was one of the biggest financial fraud cases in history.

Financial fraud is as prevalent today as it was over 100 years ago, when the Italian con artist Charles Ponzi was swindling investors out of their fortunes in one of the earliest high-profile financial scams ever recorded.

With the next recession or economic downturn in the back of investors' minds, law enforcement officials are on the lookout for financial fraud, as scammers tend to rise in influence during difficult market conditions.

So, with scandals recently in the news – the FTX fraud case, for starters – let's look at some of the most infamous financial frauds in recent history and use them as expensive examples of what can go wrong when bad actors get their hands on investors' money.

Ivan Boesky

Bernie madoff.

• Wells Fargo

Luckin Coffee

Sam Bankman-Fried, founder of collapsed cryptocurrency trading platform FTX, was sentenced to 25 years in prison in March after a jury in Manhattan, New York, found him guilty of seven counts of fraud and conspiracy including wire fraud, securities fraud and money laundering. U.S. government prosecutors have called SBF's downfall one of the biggest financial fraud cases in history. A few of his former collaborators, including business partner Gary Wang, pleaded guilty and cooperated with investigators.

Bankman-Fried launched FTX in May 2019 and was also the driving force behind hedge fund Alameda Research, which he co-founded with Wang. Flush with billions in private financing, Bankman-Fried, along with other FTX senior executives, was accused of using the money to buy plush beach homes in the Caribbean, invest in new ventures, and send money to local and national political causes.

In late 2022, the U.S. Securities and Exchange Commission said Bankman-Fried defrauded his companies' investors by steering money from FTX into Alameda Research between 2019 and 2022. Both FTX and Alameda went bankrupt, and Bankman-Fried was arrested on fraud charges in the Bahamas.

On May 8, FTX reported in a bankruptcy court filing that most of its customers will get their money back, and some may get about 118% of their claim, though that may be cold comfort for investors who missed out on the surge in crypto prices over the past two years. FTX estimated its debt to creditors at about $11.2 billion.

In March 2004, Stanford University sophomore Elizabeth Holmes dropped out of school to focus on her new startup Theranos, which set out to make blood tests more efficient, more accurate and much faster. Five years later, Holmes linked up with a new business partner, Ramesh "Sunny" Balwani, who guaranteed a $10 million loan to Theranos.

The company grew at lightning speed, with Theranos valued at $10 billion by 2014. By 2015, however, the company's highly touted automated compact testing device was exposed as unworkable by medical testing professionals. Soon after, federal and state regulators filed wire fraud and conspiracy charges against the company.

Crushed under the weight of legal costs, Theranos dissolved in June 2018. In November and December 2022, Holmes and Balwani were both found guilty and sentenced to 11 and 12 years in prison, respectively. Holmes and Balwani were ordered in May 2023 to pay restitution of $452 million to fraud victims, with $125 million of that amount owed to media mogul Rupert Murdoch.

Holmes reported to a minimum-security prison in Bryan, Texas, in May 2023 to begin her sentence, which has since been reduced by two years as of May 6.

In January, the Department of Health and Human Services banned Holmes from participating in federal health programs for 90 years, a restriction also previously imposed on Balwani.

Notorious investor Ivan Boesky died in California on May 20 at age 87 after spending the latter part of his life mostly out of the public eye, a stark contrast to his earlier years. The 1980s were fraught with financial fraud, and Boesky was among the first Wall Street traders to go to prison on insider trading charges. Boesky honed his craft that decade in the lucrative arbitrage trading market .

Nicknamed "Ivan the Terrible," Boesky made over $200 million investing in corporate takeovers and company mergers . In 1985, the SEC charged Boesky with illegally profiting from insider trading by acquiring stocks and futures in companies based on tips from company insiders.

A year later Boesky was found guilty and, based on a plea agreement that involved Boesky taping phone calls with other insider trading conspirators, including Drexel Burnham Lambert's junk bond king Michael Milken, Ivan the Terrible was sentenced to three and a half years in prison. He was also slapped with a $100 million fine and ordered never to work in the securities industry again.

Boesky is said to have inspired aspects of film character Gordon Gekko, played by actor Michael Douglas in the 1987 movie "Wall Street."

Former New York City fund manager Bernie Madoff is long gone, having passed away in prison in April 2021 at the age of 82. But the Madoff story was revived in 2023 with the successful Netflix documentary "The Monster of Wall Street," which retold the tale of the mastermind behind the biggest Ponzi scheme ever recorded.

Madoff, a former chair of the Nasdaq with close ties to government financial regulators, was already a Wall Street legend in the 1980s and 1990s. His company, Bernard L. Madoff Investment Securities LLC, was the sixth-largest market maker in S&P 500 stocks . Yet over the course of 17 years, Madoff, assisted by company managers and back office staff, ran a massive Ponzi scheme that promised investors eye-popping returns.

Instead, Madoff and his crew were inventing stock trades and fabricating brokerage accounts , and pocketing the investment money. By 2008, at the height of the Great Recession , Madoff's luck ran out, and a run on deposits and the resulting investigation revealed that his firm stole over $19 billion from 40,000 investors.

Madoff was arrested and charged with 11 counts of fraud, and he was found guilty and sentenced to 150 years in prison in June 2009.

On Dec. 8, 2022, executives at Wirecard, a Munich, Germany-based electronic payments firm, went on trial in what media outlets called the biggest corporate fraud case in German history. Former CEO Markus Braun faces multiple years in prison if convicted, though former manager and chief witness for the prosecution Oliver Bellenhaus was released from jail in February.

Another former Wirecard executive, Jan Marsalek, is reportedly hiding out in Russia and is suspected of working with Russian intelligence, according to the Financial Times. Currently, Marsalek is on Europe's "most wanted" list as an international fugitive, but that didn't stop him from sending a letter in support of Braun by way of his lawyer in July 2023.

Wirecard found itself in the fraud spotlight when it declared insolvency in 2020 and regulators found that 1.9 billion euros ($2.1 billion) was missing from the company's accounts, amid allegations from German regulators that the money never existed. Braun was arrested and Marsalek fled the country, where trial proceedings are expected to run at least until the end of the year.

Investors can only watch as the fraud trial plays out, with little hope of ever recovering their money.

Wells Fargo  

This mega-bank just can't seem to stay out of regulatory trouble. Wells Fargo & Co. (ticker: WFC ) agreed in May 2023 to pay $1 billion to settle a class action lawsuit that accused it of defrauding investors about the progress it had made toward cleaning up its act after a 2016 fake-accounts scandal. In February of this year, the Biden administration relaxed some of the restrictions on Wells Fargo that were put in place after the fiasco. But just a couple of weeks later, another class action suit for $5 million was filed against the bank alleging that it has not taken enough action to help customers hurt by the case.

In 2016, the Consumer Financial Protection Bureau slapped a $100 million fine on Wells Fargo, on top of the SEC's $3 billion in fines against the bank, as officials stated that overworked staffers were incentivized to open approximately 2 million fake accounts under customers' names. The move was eventually blamed on senior management and boosted bank profits for the short term. Yet it damaged the company's brand and alienated customers over the long term.

In March 2023, the former head of Wells Fargo's retail bank and small business lending, Carrie Tolstedt, the only executive to face criminal charges in the scandal, pleaded guilty to an obstruction charge. On Sept. 15, she received three years of probation and a $100,000 fine, but no prison time.

Wells Fargo also was ordered to pay $3.7 billion in December 2022 due to "illegal activity" involving the mismanagement of 16 million client accounts. According to the CFPB, Wells Fargo "repeatedly misapplied loan payments, wrongfully foreclosed on homes and illegally repossessed vehicles, incorrectly assessed fees and interest, and charged surprise overdraft fees."

China-based Luckin Coffee Inc. (OTC: LKNCY) appears to be a turnaround story after years of being immersed in a legal quagmire stemming from a 2020 fake revenue scandal.

The coffee giant gained visibility with a 2019 initial public offering that saw Luckin's stock rise from $17 per share to $50 in a year's time. In early 2020, however, internal financial analysts discovered the company's growth was artificially inflated due to $310 million in bulk sales to businesses linked to the company's chairman. On June 26, 2020, Luckin's shares closed at $1.38.

Investigators also found that Luckin management had fraudulently engineered the purchase of $140 million in raw materials from suppliers. Shortly afterward, the company's stock was delisted from the Nasdaq and the senior executives involved in the scandal were fired.

Now back in business, under new management and trading over the counter , Luckin is the largest coffee retailer in China, well ahead of Starbucks. Its first-quarter revenue increased 41.5% year over year, and it opened 2,342 new stores in Q1 alone. Luckin's monthly customers also increased 103% over the same period in 2023. Though nothing is guaranteed, a re-listing on the Nasdaq is also reportedly in play for Luckin, after the company convinces regulators it's back on track, ethically and legally.

This brand-name international auto manufacturer is coming off a tough year for global economies, but Volkswagen AG (OTC: VWAGY) is pulling clear of its 2015 emission standards debacle. However, residual fumes from the scandal remain, as Volkswagen settled with Italian car owners for $54 million as recently as May 15 to put their "dieselgate" legal dispute to rest.

In 2015, company engineers installed a special type of software in 11 million of its diesel-powered cars to detect when cars were being tested for emissions and change their results. The Volkswagen vehicles' actual nitrogen oxide emissions were 40 times higher than U.S. legal standards allowed. When U.S. regulators discovered the plot, Volkswagen had to recall approximately 480,000 vehicles and fork over $30 billion in fines and penalties.

In recent years, Volkswagen's new sustainability council has steered the company toward a decarbonization and e-vehicle strategy that is beginning to pay dividends, with dieselgate fading in the rearview mirror.

One of the largest corporate fraud cases of the 21st century is Enron, dubbed "America's Most Innovative Company" by Fortune magazine every year from 1996 to 2001. Formed in 1985, the former dot-com supernova made a fortune trading natural gas and other commodities and even rolled out its own digital commodity trading platform in 1999.

In August 2000, Enron shares reached a high of $90, but only a year later Sherron Watkins, an Enron finance executive, warned CEO Ken Lay that a massive accounting scandal was brewing that could take down the entire company.

Amid SEC inquiries into its finances, in November 2001 Enron admitted it overstated profits by nearly $600 million. Within roughly two months, the company declared bankruptcy and the Justice Department launched a criminal investigation of Enron. Before announcing the bankruptcy, Enron cut 4,000 jobs, and many ex-employees saw their pension plans drained.

One outcome of the Enron saga was the passage of the Sarbanes-Oxley Act of 2002, which established stricter accounting rules for public companies. Sarbanes-Oxley got a high-profile airing in April, after federal prosecutors charged defendants in the Jan. 6 assault on the Capitol with violating the act by corruptly obstructing an "official proceeding," according to Bloomberg Law. The Supreme Court is weighing whether that application of the law is an overreach, and its decision is expected in July.

7 Bank Stocks to Buy for the Dividends

Jeff Reeves July 21, 2023

Tags: investing , money , Bernie Madoff , fraud , Volkswagen , Wells Fargo , Starbucks , Enron , electric vehicles

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A study found corporate recruiters have a bias against ex-entrepreneurs. They get stereotyped for not wanting to ‘be a small piece of the puzzle’

Sometimes entrepreneurs do what many of them consider unthinkable: abandon their business to go become a salaried employee at a regular job. 

Being a working stiff can be anathema to those with the founder gene, who find the uncertainty of entrepreneurship equal parts freeing and exhilarating. But sometimes the lack of stability can become too much to bear, either financially or emotionally. Life is a bit easier with a steady paycheck and without the constant fear your startup might go bust. But when ex-entrepreneurs want to return to the workforce, they often face undue stigmas . Recruiters balk at their unusual resumes, unsure how to evaluate a candidate with unorthodox work experiences. That’s to say nothing of the stereotype they face for being impetuous and egotistical . 

“It’s really critical for them to be able to explain the elephant in the room,” says Debi Creasman, CEO of recruiting firm Raven Road Partners. “Because the vibe is that someone who’s done an entrepreneurial thing for a good long while is a bit of a maverick and doesn’t really want to fit into a confined structure or be a small piece of the puzzle.”

Former entrepreneurs are 35% less likely to get a job interview, according to research from the London Business School. This trend is usually referred to as the “entrepreneurship penalty.” 

A separate study from Rutgers University’s School of Management and Labor Relations recently sought to understand if former entrepreneurs were less likely to get hired because founders are bad job candidates or because they face bias throughout the hiring process. The researchers asked recruiters to evaluate mock resumes with comparable levels of education and experience for candidates who had worked in traditional companies, startups, or both. The study found that 60% of recruiters responded less favorably to the mock resume of a former entrepreneur. 

So while the stereotype of a mercurial, borderline antisocial founder in the mold of Steve Jobs or Elon Musk might exist (and perhaps be slightly true) the study points to the fact that companies tend to penalize entrepreneurs unfairly. One of the reasons why could be because they simply aren’t set up to evaluate candidates with unconventional backgrounds. 

From a recruiter’s perspective, it’s hard to validate an entrepreneur’s experience, says Rutgers professor Jasmine Feng, one of the researchers. 

“You are basically relying on information that is mostly self reported,” she adds. “So it’s really challenging for recruiters to understand whether their qualifications, experience, or job responsibilities are comparable to a conventional applicant’s.”

Nistha Dube, an aspiring content creator who left behind her entrepreneurial dreams in favor of a more traditional career path in education, says she regularly had to explain parts of her resume to skeptical recruiters. “I didn’t know which part of my experiences would be relevant and which wouldn’t,” she says. “I also had to explain why I’m leaving all that behind to get a job.”

Even having run a successful startup may not insulate candidates from the struggles of the entrepreneurship penalty. Research from the Harvard Business Review found that software engineering candidates with founder experience whose startups had been successful were 33% less likely to get offered a job interview than those whose companies had failed. Much of that could be because recruiters have concerns that formerly successful founders can be set in their ways because their methods already brought them to great success once. 

“If their mindset is arrogant, potentially inflexible, or just sort of dogmatic in their approach, then that might not be as appealing to a recruiter in general,” Creasman says.

More often than not, the most successful founders are best suited for executive level roles, she adds. They can parlay those experiences into the C-suite, as former Everfi cofounder and CEO Jon Chapman did. There is “no doubt” that the success of Everfi, which he sold in 2022 for $750 million, played a role in him landing his current job as CEO of the esports company PlayVS, according to Chapman. “Had I not had that type of success it wouldn’t have played out that way for me necessarily,” he says. 

Companies are eager for an ‘entrepreneurial’ culture

Meanwhile, entrepreneurs can still make valuable additions to traditional workplaces among the rank-and-file. In recent years, many companies have tried to reshape their cultures to foster more innovation . To do so, companies actively look to hire employees with some of the qualities founders tend to bring: out-of-the-box thinking, innovation, and an embrace of uncertainty. That’s especially relevant in the current business landscape where things are so volatile. The rise of AI, a murky interest rate environment, and a looming presidential election all make for particular turbulent times for companies—the exact sort of thing former entrepreneurs are suited to navigating.

Companies “are really struggling to grasp the concept of the new and the next,” Creasman says. “So when you hire somebody from an entrepreneurial background, they bring a sense of calm because they’ve lived in chaos for a long time.”

Chapman remembers his own experiences starting Everfi as being characterized by some seat-of-the-pants moments. “When you’re in a startup phase, you are constantly having to figure things out on the fly,” he said. “And make decisions quickly, without really knowing if you’re going to be right or wrong.”

To weed out the entrepreneurs that would be good hires from those who would ultimately chafe at being a cog in a bigger machine, Creasman suggests putting candidates through different scenarios during the interview. She suggests giving them an example of the sort of red tape they might encounter and asking them how they’d approach getting the proper approvals. 

Creasman also advises recruiters to try and gauge whether someone is in it for the long haul. Research shows that ex-entrepreneurs do have a higher turnover rate compared to other employees. “Certainly skill sets are important, but mindset sometimes trumps that,” she said. 

The Rutgers study also found that certain types of recruiters are less prone to a bias against entrepreneurs. Perhaps not very surprisingly, recruiters with their own entrepreneurial experiences are the most open to hiring former founders. The research also found that recruiters with a short tenure at the company and women responded more favorably to candidates who were ex-entrepreneurs. According to Feng, recruiters who had just joined the company didn’t have as much of its institutional thinking ingrained in them, while women were less likely to stereotype founders in general and instead just evaluated them using the qualifications on the mock resumes. 

Addressing the reality that entrepreneurs may have a harder time than others landing a job is just another example of the adversity those who choose that career path face, Feng says. “Those who want to be entrepreneurs need to be aware this may not always be rosy,” she says. “This could be a very bumpy road. It may lead you back to the traditional workforce, and you need to be aware of some of the career risks related to this reality.”

For Dube, it was how bumpy that road turned out to be that ultimately led her to opt for a more stable, if traditional, career option. “Every part of that experience felt like I was scraping by and trying to make ends meet.”

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