Investment Banking interview preparation
Every question below is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it. Answers are written the way you would actually say them out loud — answer first, then the mechanism, then the limitation.
100 questions, mapped to the firms that asked them
- Questions
- 100
- Traced to a firm
- 100
- Firms
- 46
- Updated
- September 2026
086What are the formulas for net revenue retention, gross retention and churn?Piper SandlerInvestment Banking · Burlingame · 2026
Say this
All three measure the same cohort a year later. Gross retention counts only what you kept, capped at 100 percent. Net retention adds expansion, so it can exceed 100. Churn is the revenue you lost as a percentage of what you started with.
Then walk it
- Gross revenue retention: starting recurring revenue from a cohort, less churn and downgrades, divided by starting revenue. Expansion is excluded, so it can never exceed 100 percent.
- Net revenue retention: starting revenue, less churn and downgrades, plus upsell and expansion, divided by starting revenue. Above 100 percent means the base grows by itself.
- Gross churn: revenue lost divided by starting revenue. It is one minus gross retention. Logo churn counts customers rather than revenue, and the two can diverge sharply if you lose many small accounts or one large one.
- The critical rule: neither retention metric includes revenue from new customers. Mixing new business into retention is the most common error and it flatters the number badly.
- Benchmarks worth knowing: best-in-class enterprise SaaS runs gross retention above 90 percent and net above 120. SMB software runs materially lower on both because small customers fail.
- Why it matters for valuation: net retention above 110 percent means the business compounds without selling, which is exactly what justifies a high revenue multiple.
Where candidates lose it
Including new customer revenue in the retention calculation. It is a cohort metric. And not knowing which one can exceed 100 percent, which immediately reveals whether you have actually used these numbers.
Expect next
- What is the rule of forty?
- Which matters more for valuation, growth or retention?
- Why can logo churn and revenue churn diverge?
Reported by candidates at Piper Sandler (Investment Banking, Burlingame, 2026). Source: Wall Street Oasis.
Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.