Resource Guide

educating the next gen of private market leaders

New to Private Markets Investing

Begin here if you are currently thinking “What is private market investing?” or if you need a refresher on the industry.

Private Markets Explained: This brief overview is a good place to start for someone that needs a high level understanding of Private Markets investing.

StepStone Private Equity Primer:  StepStone’s Comprehensive Guide to Private Equity Investing, defines and explains the ins and outs of private equity in a highly digestible format.

Private Equity Demystified:  Provides a deep dive to private equity as an investment vehicle.  While StepStone provides a 30,000 foot view, this resource is more of a textbook version and would recommend skimming through or reading specific chapters you want a deeper explanation on.

Fundamentals needed for Private Market investing

Getting into the thought process of how companies work and how they’re valued is key.  There is no one better out there than Aswath Damodaran to teach this.  

Aswath Damodaran condensed online classes

Corporate Finance:  Damodaran’s Corporate Finance class is a great starting point if you are less familiar with finance in general.

Valuations Class:  Damodaran’s Valuations class will teach you how to think about valuations of companies and get into a mindset of understanding how to approach investing.

Damodaran Website Tools:  Damodaran also has his own website with tools and spreadsheets to help with modeling.

Would also highly recommend his book “Narrative and Numbers – the value of stories in business”

Learning About Financial Modeling

Once you have an understanding of what private market investing is, how to think about finance and the drivers of a company’s valuation - you are ready to learn how to specifically model out private markets deals.

A Simple Model - Integrating Financial Statements: We recommend beginning with the A Simple Model videos on integrating financial statements.  Here you can download an excel template and work through the provided videos.  We recommend going over it an additional time from scratch so you make sure you have a deep understanding of the detailed calculations.

Interview Prep

If you are interviewing for a job in private market investing you will likely encounter a financial modeling case study. The type of model you will be asked to build will be dependent upon the specific investment strategy of the group you are interviewing for.

If you are interviewing in Private Equity you will most likely encounter an LBO model.

Building an LBO model, is not that difficult if you understand integrating financial statements. Once you have integration of the financial statements down, an LBO just simply adds extra steps that  adjust your 3 statement model.  

A Simple Model - Simple LBO: Watch A Simple Model’s “Simple LBO” model breakdown. Download the excel template he provides and build the model along with him as you watch the video.

Multiple Expansion - Training LBO:  If you want to read more about LBO modeling and how it works, Multiple Expansion runs through the whole process and does a good job clarifying what is actually going on in this model.

You may also encounter a Paper LBO model, which is a simplified model that can be written out on, you guessed it, paper.  

Private Equity Interviews The Official Guide - Paper LBO Model provides a comprehensive guide to structuring, and working through a Paper LBO step by step.  If you do this 5 times you are in a great position to tackle any other paper LBO model.

PE interview Questions

Explanation of different types of modeling you may encounter coming soon.

Guidance from the Founder:

 “Private Equity is more than a Leveraged Buyout Model (LBO).  If this is your first time with financial modeling, do not stress. Anyone can be taught to develop sufficient technical skills. Qualities such as honesty, resilience, work ethic, creativity, and interpersonal skills are just as important as your technical competencies.

No matter your educational background, candidacy within private equity is not defined by where you come from. In fact, non-traditional skills might make you a better candidate as you can bring an outside perspective to the table. With effort and practice you can use the tutorials and technical skill examples listed below to get you started, or assist you in continuing to master your knowledge on LBOs.

Pipeline has aggregated free private equity resources to prepare you with the required knowledge and training for financial modeling, constructing a paper LBO, and for private equity case study LBO exams.  These quality resources are available from beginner to experienced individual levels.”

-Tara, Founder of Pipeline

Practice Full Case Studies

Once you sufficiently understand the basics of how an LBO model should look and what it does, you are ready to practice Case Studies.  

Typically, a private equity firm will give you a Case Study with some directions and a template to complete in a certain amount of time.  We have generated 5 case studies in order of increasing difficulty, which are designed to teach you how to model complex mechanics and structures (operating model, PIK interest, minority investment, dividend recap, add-on acquisition).  

See Case Studies page

Practice Interview Questions: