Harvestly — Long-Term Margins & Valuation
An 8-hour Venture Investment Exercise case study with a complete model answer
Modeled After
Greenoaks
The take-home exercise Greenoaks is reported to set: three open questions — long-term margins, what the company does to its industry, and a valuation built from scratch — on a brief that is open by design, with almost everything the answer needs sourced by the candidate.
Structure and exercise format are modeled after Greenoaks — the take-home exercise format the firm is reported to use. The company, the credit-card panel data and every figure in this case are entirely our own.
The Situation
Harvestly, Inc. runs an online grocery marketplace.
Harvestly, Inc.
- Sector
- Consumer internet / marketplaces — online grocery, with a transaction take rate on retailer volume and an advertising business sold to consumer packaged-goods brands
- Size
- Geography
- United States, with a delivery footprint covering 95.0% of the population and a long tail of regional grocery chains alongside the national ones
- Ownership
- Situation
The Prompt
You are a candidate for an investment role at a fund that holds positions for years rather than quarters. The exercise arrives by email on a Friday afternoon with a short note:
"Harvestly.
Supporting Materials
What you are handed at the start of the case, in the format a real process would use.
Blank modeling template (template.xlsx)
The credit-card panel (given in the template)
Market and third-party data (given in the template)
What You Have to Produce
The deliverables, in the order the committee will read them. The exercise runs 480 minutes.
PART 1
Build the per-order economics bridge, and find both plugs
PART 2
Say which denominator you are quoting, and print both
PART 3
Rank the drivers, and put the bear case first
PART 4
Answer the industry question with a counterfactual
PART 5
Build the size from the market down
PART 6
Bridge today's margin to the steady-state one, and value it
PART 7
Sensitize on business drivers, not on the discount rate
PART 8
Decide what to do with the file you were given
Attempt It First
Blank modelling template
The answer model with every produced cell cleared — the shell you build your attempt in. Work it in Excel against the clock, then check yourself against the model answer below.
How to Approach It
The order a strong candidate works in, and why. This is the shape of the answer — the finished memo and Excel model are in the solution set below.
- 0:00 – 0:45
read everything, and decide about the panel early
- 0:45 – 2:15
the per-order bridge
- 2:15 – 3:45
the top-down build
- 3:45 – 5:45
the discounted cash flow
- 5:45 – 6:45
sensitivities
- 6:45 – 8:00
write it
Key Concepts
The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.
Take rate
The share of the volume flowing through a marketplace that the marketplace keeps as revenue. It is the reason a margin quoted on revenue can mislead here: revenue is itself a take rate, so a margin struck on it moves when the take rate moves even if nothing about the underlying economics has changed.
Gross transaction value
The total value of orders placed through the platform, before the marketplace's own fee. Quoting margins in basis points of gross transaction value rather than as a percentage of revenue is what makes a marketplace's economics comparable across periods and across peers.
The plug
The line in a bridge that is not assumed but falls out of the others as a residual. Whichever line is the plug is the claim the write-up has to defend, and an exhibit that does not name its plug is presenting an assumption as an output.
Perpetuity growth method
A terminal value struck as the final year's cash flow grown one period and capitalized at the difference between the discount rate and the growth rate. The growth rate is the most abusable assumption in any valuation, which is why it is far more defensible when it is set by reference to data already inside the model than when it is simply chosen.
Treasury stock method
The convention that dilutes a share count by the options outstanding NET of the shares the strike proceeds would retire. Restricted units are added gross, because nothing is paid for them. Treating both the same way in either direction is wrong, and the difference is real money on a company this size.
Counterfactual reasoning
Answering an implications question by constructing the world in which the thing being studied does not exist, rather than by listing effects. It is the strongest available structure for a qualitative question.
Method validation
Setting a series you derived against an independent series you did not, and reading the agreement as evidence about your METHOD rather than about your number. Agreement in both directions is a check; agreement in one direction is a bias.
Landed versus total volume
Running customer acquisition spend off total volume mechanically assumes a company keeps paying to acquire customers it already has. Running it off newly landed volume — the thing the spend actually buys — usually produces a very different long-term number, and the gap is worth quantifying even when you decide to exclude it.
What Makes It Hard
The specific traps in this case — the places candidates lose the assessment without noticing.
Check Your Answer
Type the figures you produced and find out how many are right before you open the worked answer. You get a verdict and, where you are off, a pointer to the part of the build to re-check — never the number itself. Everything you type stays on this device.
How to type a figure. Digits, with an optional unit: 1,234.5, $1,234.5, 2.6x, 21.4%. For a negative use (20.0) or -20.0. Enter as many decimals as you carried — precision is never penalised.
What the Case Asked For
The arithmetic is only half of it. Tick off what you actually produced — this half is yours to score, because nothing can grade a written recommendation from a checkbox.
The Model Answer
The worked answer in full: memo and Excel model, built the way a banker would actually build them. It is a reference, not a submission — a strong answer under the clock is far shorter.
What the Solution Covers
- —Unit economics bridge
- —Long-term margin structure
- —Take rate and advertising monetization
- —Third-party data triangulation
- —Scratch DCF valuation
- —Industry impact analysis
Memo
The written recommendation and how it was reached
Upgrade to Diamond
Sign up and upgrade to Diamond to unlock the memo, the Excel model and the audio walkthrough.
Get StartedThe Excel Model
The model is linked and tied out end to end — every schedule, every formula and every check, in the file itself.
Downloads are available to Diamond members
Excel Model and Memo (PDF) — yours to open, edit and rebuild
Walkthrough
A conversational walkthrough of how to approach the case under time pressure — where to start, what to cut, and how the recommendation gets defended.
Audio Walkthrough
How to approach Harvestly — Long-Term Margins & Valuation
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
Is this a discounted cash flow exercise or a margin exercise?
Both, and they are the same exercise. The margin work sets the steady-state percentages; the cash flow model walks today's reported actual to those percentages and prices the result. If your terminal margin is not identical to your bridge, you have built two models rather than one, and a reader will find the seam.
How much of the eight hours should go on the model?
Less than you think. The brief says explicitly that model hygiene is not what is being graded, and the memorandum is the deliverable. A back-of-the-envelope model that announces its own crudeness and makes the written argument falsifiable beats a polished one attached to two pages of hedging.
What do I do with the credit-card panel?
Work it up, extract the one defensible reading, name in specific terms what you could not resolve about it, and then put it in an appendix and wire it into nothing. The temptation is either to ignore it because it is awkward or to lean on it because it was given to you. Both are wrong, and the correct answer looks like effort followed by restraint.
Should I assume market share holds flat?
You should decide, and then say why. Holding share flat is a real assumption, not a neutral one: it assumes that the largest general-merchandise retailer's own investment in this capability fails. Assuming share falls is the conservative direction, and stating which direction is conservative is part of the answer.
Do I need to charge stock-based compensation?
You need to decide and to say so either way. The market quotes this company on a measure that excludes it. If you value it on the same measure without saying so, you have valued a company that never pays for the equity it issues, and on a business at this stage that omission is worth several dollars a share.
Is there a leveraged buyout in this case?
No, and importing one is the most common way to get this exercise wrong in kind rather than in detail. There is no sponsor, no acquisition debt, no cash sweep, no exit multiple and no returns bridge. The company carries no debt at all, so any attribution leaning on deleveraging has nothing to lean on. The question is what steady-state margin structure the business supports and what that structure is worth.
Is this format still used?
Yes, and it is the most transferable of the long-only and growth formats because it is closest to the actual work. A firm sends three open questions and one imperfect file, and wants to see how you decide what is worth knowing, where you stop, and what you are willing to put your name to.
About This Venture Investment Exercise Case Study
Venture Investment Exercise case study for venture & growth interviews. 480-minute format covering unit economics bridge, long-term margin structure, take rate and advertising monetization. Includes the full prompt, a written memo, a tied-out Excel model and an audio walkthrough.
This case study sits in Venture & Growth, under Investment Exercises. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.
480-Minute Format
The time limit a real assessment would give you
Memo
Included in the model answer
Excel Model
Included in the model answer
Audio Walkthrough
How to approach the case under time pressure
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