Private Equity interview preparation

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September 2026

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1. 046How would you diligence a founder-run business?Due diligenceHardsuperdayAudax GroupPrivate Equity · Boston · 2021HIH.I.G. CapitalPrivate Equity · Paris · 2024

   Say this

   Assume the reporting is weaker than it looks and the founder is more central than anyone admits. The two questions are what the real earnings are, and what happens to the business when the founder steps back.

   Then walk it

   1. Financial reporting is usually thin. There may be no audited accounts, no management accounts by segment, no unit-level profitability. Budget more time and money for quality of earnings than you would for a corporate carve-out.
   2. Personal expenses run through the business are standard: cars, travel, family on the payroll, property. These are legitimate add-backs but each needs verification, and they are also a signal about controls.
   3. Founder dependency is the core risk. Which customer relationships are personal? Who actually makes pricing decisions? Is there a second layer of management, or does everything route through one person?
   4. Test it concretely: ask what happened when the founder took a long holiday. Ask the customers who they call. The answers are usually revealing.
   5. Related-party arrangements: property leased from a founder-owned entity, supply from a family business, loans in both directions. All need to be put on arm's-length terms before closing.
   6. Then structure around what you find. Rollover equity and an earnout keep the founder engaged; a transition agreement with defined handover milestones; and building the second layer of management is usually the first hundred days priority.

   Where candidates lose it

   Treating it like a corporate diligence. The distinctive risks are informal reporting, personal expenses and founder dependency, and the answer should end with how you structure around them rather than just listing them.

   Expect next

   • How would you structure the founder's rollover?
   • What if the founder wants to leave immediately?
   • How do you value a business where the owner works unpaid?

   Reported by candidates at Audax Group (Private Equity, Boston, 2021); H.I.G. Capital (Private Equity, Paris, 2024). 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.