Intern Interview Pre-Work

Private & Confidential

Kevin Hong
Managing Principal
Caprae Capital Partners
Note from the Founder

First off, before you begin our handbook and kick off Caprae Capital’s interview
process, I want to congratulate you for being pre-selected. For each cohort round
of interns, we generally receive about 500 applicants and select on average 10. Of
course, many interns, given the workload for the handbook, do not finish; hence
there is some skewness in the data set so please do not be too intimidated.

In a nutshell, Caprae Capital looks for several characteristics. We pride ourselves

on bringing in not just successful interns but individuals who can and have the
desire to change the world some day. As we have refined our interview process
over time, I have simplified what we look for in a candidate - character, courage,
creativity… and if applicable, crazy. By crazy, we mean this in a good way - a
burning desire and the mental and physical stamina to take the time to master
one’s craft and become world-class in what they do.

While many programs measure a candidate's potential by school pedigree,

SAT/ACT scores, GPA, financial modeling skills, prior internships, etc. I do believe
simplifying the recruiting process to such metrics and relying on data points not
generated on your own is not only intellectually lazy but also dangerous for any
organization aspiring to become world-class. We look for independent thinkers,
those who are never afraid to question, and avoid those who look at finance as a
means to an end, a vehicle for a fat payday, or a nice trophy to stamp on their
resume. Therefore, every step of our interview process is quite intentional and is
aimed to seek out the right candidates that can thrive in our system.

In a short period of time, our internship program has become very highly-
regarded. Some of our interns received invitations to internship programs or FT or
PT positions at Blackstone, BMO Capital Markets, and notable hedge funds and
family office PE Funds as well as various consulting and startup roles. Additionally,
given our reputation and connections, various PE or VC shops have reached out to
us to fill in positions for their company, by asking for resumes from interns that
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have been part of our program (Think of us as an MLB “Farm system” to make it
to the pros)
Of course, not everyone is able to maximize his or her potential here, but for the
ones that have great upside, I try to part the red sea as much as I can. At the end
of the day, when comparing talent vs experience, I liken this to comparing
horsepower vs mileage. At Caprae Capital we love horsepower. Hence, several of
our interns, despite their young age, have had the pleasure of joining me on
business trips to London, Frankfurt, Chicago, etc while still at school, to network
and establish business relationships. We also carved out an investment
management team where our best interns reach out to some of the more
promising companies and discuss with sellers, business brokers, PE Shops, and
M&A advisors about the possibilities of working together.

I guess the most stunning statistic of Caprae Capital is that we now have 9 interns
who have stayed post-graduation and/or are working full-time jobs on top of their
role here at Caprae Capital. I am proud to see that the fund that we have
launched has provided not only so much career value but a high-level of
satisfaction with a sense of pride and ownership for those who have remained
dedicated.

Although I do not interview candidates directly, I do review all the recorded videos
should you reach that stage. I wish you the best of luck during the interview
process and appreciate all the time you will be spending to get to know us. I hope
to meet you on the other side and look forward to building a world-class company
together.

Thanks,

Kevin

PS - Although we are a finance firm, we are a founder/operator first company.

While companies and countries may come and go, culture remains. PLEASE READ
what we mean by that on our founder’s latest post on how we use AI for
messaging and what we are trying to accomplish through corporate governance.
Also, please check out our recruitment video
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Table of Contents
Table of Contents ...................................................................................................4
1. Executive Summary ...........................................................................................5
2. Search Strategy .................................................................................................6
3. Illustrative Thesis ...............................................................................................7
4. Company List: From Chose Industry..….............................................................8
5. Sample Outreach Email .....................................................................................9
6. Appendix Example ………………………………………………………...………...10
7. Basic Pre Interview Questions …………………………………………...………...10
8. Resume Attachment……………………………………………………...……….....11
9. Compensation…………..…………………………………………………….……....11

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1. Executive Summary
Caprae Capital Partners (Caprae Capital) is a financial services and buy-side advisory firm
seeking to acquire private companies with an EBITDA between $1.5 and $10 million. Our
targets are located in the technology sector, specifically in the IT industry, and we aim for
companies with significant recurring revenue and trading for a reasonable multiple
commensurate with its growth and investment return potential. Caprae Capital also offers
innovative services like SaaS (Search as a Service) and MaaS (M&A as a Service) in order
to provide tailored support to entrepreneurs navigating the search fund process.

Companies will be sourced through tailored direct methods, such as warm introduction,
industry associations, and highly customized direct marketing campaigns.

If you receive and accept an internship offer from Caprae Capital, as part of the internship
you will be expected to develop industry theses that meet our criteria, develop lists of
companies that fit that criteria, and outreach to them through direct marketing campaigns.

In preparation for your interview, please prepare a one-page memo on an industry that fits
our criteria, a list of 5 companies within that industry, and an initial outreach email to one of
those companies. Finally, answer each question.

Also be sure to mention any tools/databases you have access to (through school, or any
other means) and plan to use for this research (ie. ReferenceUSA, SourceScrub, Zoominfo,
Growjo etc.) See Section 7: Appendix for examples.

Note: the initial outreach email should be written with the end goal of connecting with the
business owner as much as possible. You will write this to draw a connection with your
background/education/hobbies etc. This will require you to dig in deep and research articles
an owner/seller has published, media engagements, social media bios and more. We have
provided an overview of our search strategy and an example thesis to help aid you.

What should you include in a good pitch?

A good industry pitch has accurate/powerful/interesting data; is brief and to the point; and
addresses key risks as well as key opportunities and major industry trends. Pitch it as if you
were pitching to investors.

Key deadlines:
Please submit your work to within 7 days from the day you have received this message:
[email protected], [email protected]
Once you have submitted your work, a member from the talent management team will send
you a link to schedule an interview with the executive team. (The sooner it is submitted, the
sooner we can get to meet you!)

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Interview Steps:

1. Submission of resume/application
2. Review of application (within 3 weeks of submission)
3. Handbook submission (7 days to complete) => You are here
4. 8-minute Screening interview (4 days to complete)
5. Final Decision (decision usually within 5 days)

2. Search Strategy
An industry-driven origination starts by identifying industry sectors and selecting
companies that meet the fund’s investment criteria.

A. Identify Sector

Sector ideas come from a variety of sources: prior work experience, research
reports, sector insiders, and MBA network. Caprae Capital Partners will be
focused on B2B services in sectors with large assets where the Principal can
leverage his expertise in the operation of the business.

Examples of sectors that Caprae Capital plans to pursue are:

● ITAD (IT Asset Disposition) Industry

● ITAM (IT Asset Management)
● IT TPM (Third-Party Maintenance)
● Onsite Destruction/wiping
● IT MSP Companies

Identify Industries

Build an understanding of different industries within a sector and identify ones

that have a high level of recurrent revenue and companies are differentiated
on attributes, other than price.

B. Build a List of Companies

Identify targets, screen companies based on pre-set criteria and initiate

conversations with business owners.

C. Validate and Test Thesis

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 Continue screening companies and validating industry theses. Repeat A-C.

3. Former Illustrative Thesis: Industry Memo (EDTech

Example - Please use the industries listed above as we
are now pursuing different industries)

Illustrative Thesis Example II: Niche Online Education

Industry Premier Parent Industry: Educational Services

NAICS #: 61110
Industry Size Global: $90.37B by 2023
Industry Growth USA: $21.64B by 2024 (E-Learning)11
Industry CAGR Global (2019-2023): >9% (Distance Learning)12
Industry CAGR USA (2020-2024): 12% (E-Learning)13
Gross Margins: ~58% (Educational services industry) & ~77% (Technology Sector)14

Industry Size and Growth The E-Learning market in the US is expected to grow by $21.64B during the period of 2020-2024. Part of
the reason for this strong growth is high demand for online education for its affordability and accessibility.
In addition, due to the extensive digitalization, the increase in the number of internet users is increasing
the opportunity for the companies operating in this space. With in-person learning so heavily impacted by
COVID-19, the industry has experienced exponential growth in 2020. In addition, 64% of high school
students in the US use digital learning tools everyday as well as 45% of elementary school15

Business Model Online education providers offer a variety of tutoring services in a range of academic subjects, across all
and Strategic age groups. To be successful in this industry, companies must be able to quickly adopt new
Analysis technologies, access a highly-skilled workforce and
possess a good reputation.16

Value Drivers There are several reasons for students to choose online learning: such as existing commitments that do
not allow for attendance in campus-based activities, distance learning, employer requirements and
incentives, etc. Challenges such as the lack of engagement between student and faculty can be
improved. Due to its affordable education and high margin for the business, there is a lack of defensibility
in this industry. Value can be created by shifting to a more permanent online learning environment, which
can in turn allow for longer term contracts with companies and institutions, which can work particularly
well for niche education and/or employee training services.17

Caprae Capital Strategy The Principal of Caprae Capital is an adjunct professor at Chapman University. He is very well aware of
the issues associated with students and faculty engagement as well as the new content development.
The Principal also has an extensive network of professionals working in academia and in the EdTech
space. Prior to graduating and officially launching his search, the Principal intends to re-establish and
establish relationships with professionals in the industry and attend industry trade shows to recruit a team
of river guides. Additionally, the Principal has been an active writer, allowing him to gain access to key
influencers in the industries he is involved in, as well as free access to many trade shows and VIP
events. We believe his background and his skills will give him a sizable advantage in this fast-growing
space.

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Key Resources Industry Groups Trade Shows
● Online Learning Consortium ● DevLearn
● The World Association for Online Education ● ATD Tech Knowledge
● United States Distance Learning Association ● Learning DevCamp
● The International Association for Distance Learning ● Training Conference
● CLO Symposium

10 NAIC
11 Business Wire
12 BusinessWire

13 BusinessWire

14 CSIMarket

4. Lead Generation Task

Your task is to identify 10 companies that fit the following investment criteria:

1. Industry: ITAD Industry

2. Employee Count: 10-50
3. Revenue Estimate: 1 million and 10 million in revenue
4. Year Founded: After 2000
5. CEO Age: 45+
6. Please use SaaSquatch Leads as this will be your primary tool used during your
time at our company
a. Please use the free version to use up to 5 credits. Please indicate which
leads you used via SaaSquatch. Indicate which leads were generated via
SaaSquatch.
b. For the other remaining 5 leads, please use an external database. If you
do end up signing up to use SaaSquatch to pay for additional leads, that is
not required, but that is acceptable if you are confident in your ability to
source leads.
c. Please provide feedback on our tool
i. 3 things you liked
ii. 3 things you did not like
7. Create a Google Sheet and structure each lead as follows:

5. Why Caprae Capital (No more than 3 paragraphs)

Please explain why you want to intern here vs other internships

6. Appendix Example

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 1. NAICS
2. BusinessWire
3. CSIMarket
4. ZoomInfo
5. ReferenceUSA (Data Axle Reference Solutions)

7. What is Caprae’s Mission? How is Caprae Changing

the ETA Space and Broader PE?
Here are some links
● Search Fund CEO Termination Issues
● #BleedandBuild
● Recruiting Video
● SaaSQuatch

8. Basic questions:
1. Will you need course credits for the internship?
a. We also offer performance incentives - commission, stipend, part-time
paid roles, intern of the month/week, acquisition bonuses (in certain
instances, course credit will disqualify you from these bonuses, so
please let us know)
2. Are you willing and able to work a minimum of 12-hours/week?
3. Will you be able to start immediately on the following Sunday? (This is
required)
4. Will you be able to attend our Sunday Strategy meetings at 12:30 PM EST?

9. Please attach your resume for our management team to

review.

Once submitted, your handbook will be evaluated. If you receive a satisfactory

score, you will receive an interview invite for a 10-minute screening interview within
2-3 business days. Only handbooks that have passed will receive an invite for a
screening interview. Candidates that pass, must be able to start immediately. For
those who desire to postpone their start date must reapply. Reapplicants must wait
at least 6 months before reapplying. For those that fail the handbook, unfortunately
you will unlikely receive a notification. Caprae receives 1000s of applicants and it is
not always possible for our staff to follow up with all candidates. To allow for parity in
the interview process, extensions will not be allowed
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Good luck!

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