Quarrow — B2B Marketplace Investment Exercise
An 8-hour Venture Investment Exercise case study with a complete model answer
Modeled After
Greenoaks
The three-question open exercise Greenoaks is reported to set — long-term margins, industry implications, and a valuation built from scratch — supported by a single firm-provided cohort dataset of intentionally imperfect quality, with everything else 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 financials and every figure in this case are entirely our own.
The Situation
Quarrow Freight Exchange, Inc. runs a digital freight marketplace.
Quarrow Freight Exchange, Inc.
- Sector
- B2B marketplaces — digital freight brokerage, with a transaction take rate on shipper freight spend and a platform services business sold to the same shippers
- Size
- Geography
- United States, running full truckload freight over a carrier base in which the great majority of capacity sits in fleets of ten trucks or fewer
- 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:
"Quarrow.
Supporting Materials
What you are handed at the start of the case, in the format a real process would use.
Shipper transaction extract (data-1.xlsx)
Blank modeling template (template.xlsx)
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-load economics bridge, and find both plugs
PART 2
Say which denominator you are quoting, and print both
PART 3
Decompose net new volume into expansion and land
PART 4
Build the size from the market down, and validate the method
PART 5
Make the forecast pay for itself in land
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
Say what is wrong with the file you were given
PART 9
Answer the industry question with a counterfactual
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 audit the file before you use it
- 0:45 – 2:00
the per-load bridge
- 2:00 – 3:15
the cohorts
- 3:15 – 4:30
the top-down build
- 4:30 – 6:00
the discounted cash flow
- 6:00 – 6:30
sensitivities
- 6:30 – 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 net revenue. It is the reason a margin quoted on revenue can mislead here: net 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 freight transacted through the platform, before the marketplace's own cut. Quoting margins in basis points of gross transaction value rather than as a percentage of net 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.
Land versus expansion
Net new volume in any period is what existing cohorts spend beyond what they spent last period, plus what an entirely new cohort brings. Separating the two is what turns a growth rate into a statement about the business, because the two are bought with completely different resources and fail for completely different reasons.
Gross transaction value retention
A cohort's volume in a later period as an index of its volume in the period it landed. Above one hundred it is expansion rather than churn, which is the normal shape for a B2B marketplace: a customer that starts with one lane moves more of its spend onto the platform as the service proves out.
Implied land
The volume a forecast requires a new cohort to bring, computed as the forecast less what the existing cohorts deliver on an assumed retention curve. Treating land as an output rather than an input is the only construction in which a cohort model can disagree with a top-down forecast, which is the only reason to build one.
Upper-triangular panel
A cohort dataset in which a cohort landed in period k has at most N minus k periods of observed activity. It is not a flaw but it is a hard constraint: the number of cohorts that support a full first-year retention figure is far smaller than the number of cohorts in the file, and saying how many is more useful than the figure itself.
Terminal normalization
Restating the final forecast year's cash flow onto the basis that actually persists in perpetuity. Where a working-capital drag scales with the CHANGE in volume, carrying the last forecast step into a perpetuity charges the business a cost it only incurs while it is growing quickly, and the error compounds through the whole terminal value.
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 and it is what separates an analysis from a summary.
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
- —Take rate and gross transaction value build
- —Land versus expansion cohort decomposition
- —GTV retention by cohort
- —Working with a deliberately imperfect dataset
- —Two-way sensitivities on business drivers
- —Counterfactual industry 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 Quarrow — B2B Marketplace Investment Exercise
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
Is this a discounted cash flow exercise or a cohort exercise?
Both, and they are the same exercise. The cohort work does not produce a valuation on its own; it produces a judgment on whether the top-down forecast the valuation runs on is achievable. If your cohort table and your discounted cash flow are two separate answers, 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 about the flaws in the supplied file?
Name each one, state the inference and the treatment, and say what the treatment cost you. The temptation is either to clean the file without saying so or to complain about it in general terms. Both are wrong. A specific ambiguity, a stated inference and a proportionate decision is the whole of what this part of the exercise rewards, and a candidate who fixes the file without ever saying what was wrong with it has done half the work.
Should I fit the retention curve on the average of the cohorts?
You should decide, and then say why, because it is the judgment the rest of the exercise rests on. The observed first-year steps are not flat, and the direction they move in is a fact about the business rather than noise. Averaging over a trending series is a choice with a name, and the sensitivity you owe the reader is the one that prices the difference between your anchor and the alternatives.
Which matters more, the take rate or the volume?
Compute it rather than asserting it — one grid answers it — and then say something about believability as well as magnitude, because the two do not point the same way. One of the two is a claim about a market that third-party data can check. The other is a claim about what the company can keep out of its customers' spend, and nothing outside the company can test it.
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 take rate and gross transaction value build, land versus expansion cohort decomposition, gtv retention by cohort. 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
200K+ students have used IB Vine to help land offers at top firms.
Moelis & Co.
“I loved IB Vine. I’m going into Private Capital Advisory (PCA); you have the lessons on there for PCA and that was actually a game changer. I went into those interviews and knew about the core PCA concepts like net asset value, primary fundraising vs. secondary advisory, etc. I swear I was on IB Vine like a few hours a day. The opportunity to have that learning section and go through the questions people submit and everything — there’s no better tool out there. I loved the guides/lessons. The user interface is amazing. The way you’ve simplified it is so spectacular — it’s just so much easier to digest. It’s fun to use too; I’d rather use IB Vine than scroll through a guide. To be honest, I think the product is perfect. I genuinely owe you a big thanks.”
Moelis & Co.
“IB Vine is a tool we really love to use in the club I’m a part of, and there’s really no other resource like it. You guys do a phenomenal job with the question bank. I recruited specifically for Energy banking, and IB Vine was my most used resource for generalist questions (which were about 50% of my interview questions; the rest being Energy-specific); the majority of such questions I saw in interviews were at least similar (if not the same) to the ones on IB Vine.”
Perella Weinberg
“Once I read through the BIWS learning guides, I really didn’t refer to them again. I didn’t even really run through the 400 question guide once I found IB Vine, which I heard about through one of my classmates. We even get a free subscription (like most business schools) to Wall Street Prep, and if I’m being completely honest, I never even logged in to WSP. IB Vine is pretty much the only tool I used (along with our club question bank & mock interviews with peers) and it was invaluable for recruiting.”
Cantor Fitzgerald
“What a platform, made such a huge difference. I did superdays at Evercore, PJT, M. Klein and Barclays among others from a non-target school and did not miss a single technical in any interview process through prepping with IB Vine.”
Barclays
“Very accurate questions and all of the solutions are easy to follow. At least 10 of the questions I studied through this platform appeared in my Round 1 or Superday interviews.”
TD Securities
“THANK YOU SO MUCH IB VINE, I COULD NOT HAVE DONE THIS WITHOUT YOU, SERIOUSLY!!! IB Vine was the best website ever. I spent at least two hours on this daily (seriously) from October through I get my offer in February.”
Citadel
“I’m doing public equities this summer and next. I know the name is “IB Vine” but at the undergrad level a lot of the technicals across public equities are the same as investment banking. I recommend your software to all my friends!”
Piper Sandler
“I loved this site! 1000% this is the best resource I used in the process.”
Lazard
“This was the greatest tool ever. I genuinely enjoyed running through the technicals/behaviorals and it was very helpful!”
Houlihan Lokey
“IB Vine was the most helpful resource I had during recruiting. I will continue to promote it to other students at WashU and elsewhere.”
Jefferies
“Awesome product, helped me crush my technicals in my interviews and land a great role. Thank you, seriously was a huge help.”
Morgan Stanley
“Very helpful to get real-life questions unlike the 400 guide, especially for merger math. Built deeper understanding of key concepts.”
Houlihan Lokey
“Extremely helpful study tool that carried me through the recruitment process from start to end.”
Evercore
“You guys are doing great work over there with IB Vine. Absolute staple for interview prep.”
Rothschild
“IB Vine was incredibly helpful and I am forever thankful for all the help.”
RBC
“IB Mock was amazing - I used it for multiple hours. Also the flashcards and the lessons features on IB Vine were fantastic. Thank you!”
Dragoneer
“IB Vine is such a great platform, really impressive. There is so much value in this. The audio podcasts / mock interview library are pretty incredible.”
Case Study Preparation
Explore All Case Studies
100+ case studies, each with the full prompt, supporting materials and an audio walkthrough; most also ship a model answer deck and a tied-out Excel model.
Every case has a public page like this one. The member library is the signed-in index members work through.