How to build an investment banking course: a complete guide for lecturers

Central question: What does an investment bank actually do for a client, and how do product, sector and capital-markets teams work together on a transaction?

Start by making the industry concrete. Students should distinguish advisory work from principal investing and recognise that the same client can move through M&A advice, equity issuance, debt financing and restructuring over time. This concept establishes the client mandate, role boundaries, fee incentives, information barriers and deal-team workflow before students touch a valuation model.

What this concept covers

• Advisory, underwriting and capital-markets activities within an investment banking division.
• Coverage teams, product teams, execution teams and syndicate functions.
• Buy-side and sell-side mandates, pitches, engagement letters and transaction objectives.
• Conflicts of interest, material non-public information, confidentiality and information barriers.
• The deal lifecycle from origination and pitching to execution, closing and post-deal review.

Learning outcomes

• Map a client problem to an appropriate investment banking mandate.
• Distinguish advisory, underwriting and lending roles.
• Explain how sector and product teams divide responsibilities.
• Identify common conflicts and professional-conduct risks.

How to teach it

• Use a bank organisation chart and ask students to route five client requests to the right team.
• Give three short client briefs and require a one-minute pitch for the proposed mandate.
• Contrast a sell-side M&A mandate with a bond underwriting mandate and an IPO mandate.

Case-style example

Asteron Plc, a listed industrial group, has £420 million of net debt, a non-core software division worth an estimated £650-£800 million and a £300 million acquisition under consideration. The CFO asks one bank for advice. Students must name the mandate, assemble the deal team and choose whether to prioritise a divestiture, acquisition financing or equity raise. Two defensible answers emerge. Students discover that mandate definition shapes every later analysis.

Where students struggle

Students often equate investment banking with stock trading or assume one banker personally performs every task. Push them to identify client objective, mandate, role, information set and conflict before selecting a technique.

Reading and a quick check

Set the introductory chapters of Stowell and the Rosenbaum-Pearl introduction. Quick check: give students four client requests and ask for the bank team, likely deliverable and principal conflict in one sentence each.

Where a simulation fits

The Investment Banking Simulation is best used later as a capstone, but this opening concept lets lecturers preview the changing lender, PE, buy-side and sell-side responsibilities students will encounter across its four rounds.

Where it leads

The next step is to make students fluent in the accounting evidence that supports valuation, financing and deal recommendations.

Central question: Which accounting signals matter most before a banker can value, finance or market a company?

Investment banking analysis begins with financial statements, but the teaching aim is not ratio memorisation. Students should learn to normalise earnings, reconcile cash flow, distinguish recurring from non-recurring items and identify working-capital or accounting issues that could change valuation, leverage or transaction credibility.

What this concept covers

• Income statement, balance sheet and cash flow statement linkages.
• EBITDA, EBIT, net income, free cash flow and enterprise-value bridge items.
• Quality of earnings, one-offs, capitalised costs and non-recurring adjustments.
• Working capital, capex, leases, pensions and other items that affect net debt or cash conversion.
• Transaction readiness: data room quality, forecast consistency and disclosure discipline.

Learning outcomes

• Reconcile the three financial statements at a transaction-analysis level.
• Normalise reported earnings into a defensible adjusted EBITDA.
• Identify accounting items that alter enterprise value, equity value or debt capacity.
• Prioritise diligence questions arising from the financial statements.

How to teach it

• Use a short set of statements with five deliberately ambiguous adjustments.
• Require students to bridge reported EBITDA to adjusted EBITDA and explain each adjustment.
• Ask one team to defend management adjustments and another to challenge them as a buyer or lender.

Case-style example

Marlow Components reports 2025 EBITDA of £34 million. Management adds back £3.0 million of restructuring costs, £1.5 million of founder salary above market, £2.2 million of customer-acquisition spend and £1.8 million of losses from a closed site. Students compute adjusted EBITDA, then prepare a banker view and a buyer view. They discover that a £4-£6 million disagreement can move valuation materially at an 8.0x multiple.

Where students struggle

Students often treat EBITDA adjustments as automatically valid. Require an economic rationale, evidence of recurrence and consistency with the valuation or financing purpose.

Reading and a quick check

Use a short quality-of-earnings note alongside the financial-statement sections in the core textbook. Quick check: ask which two adjustments should survive a buyer challenge and why.

Where a simulation fits

The Investment Banking Simulation explicitly uses historical financials, management forecasts, financial statement analysis and model outputs. Place the simulation only after students can distinguish reported performance from transaction-adjusted performance.

Where it leads

Once students can trust and adjust the historical base, they can build forecasts that support valuation and financing.

Central question: How should a banker translate historical performance and commercial assumptions into a model that can survive challenge?

A model is a structured argument, not a spreadsheet decoration. This concept teaches students to connect operating drivers to the three statements, build transparent assumptions, distinguish base, upside and downside cases, and document which inputs are management claims versus analyst judgements.

What this concept covers

• Revenue, margin, working-capital, capex and tax forecasting.
• Linking operating assumptions to free cash flow and financing needs.
• Scenario and sensitivity analysis rather than one base case.
• Model checks, circularity control, units, signs and transparent formula design.
• Audit trail and assumptions notes for team review.

Learning outcomes

• Build or critique a forecast model using explicit operating drivers.
• Trace an assumption through EBITDA, cash flow and valuation.
• Construct a credible downside scenario.
• Document model limitations and evidence sources.

How to teach it

• Give students a partially completed model with three broken links and two hidden hardcodes.
• Ask groups to identify the five assumptions that matter most to the transaction.
• Run a model review where one team is analyst and another is associate checking the work.

Case-style example

NorthQuay Logistics has 2025 revenue of £180 million, 12% EBITDA margin and £8 million of capex. Management forecasts 14% annual revenue growth and a 16% margin by 2028. Students build a three-year base case and a downside with 7% growth, 13% margin and capex rising to £12 million. They must identify which case better supports a £220 million debt package. Students discover that model structure exposes financing risk earlier than valuation output alone.

Where students struggle

Students chase spreadsheet complexity. A shorter model with visible drivers, checks and scenarios is more teachable and more defensible than a dense model with unexplained assumptions.

Reading and a quick check

Use the valuation-model templates accompanying Rosenbaum and Pearl as a format reference. Quick check: ask each team to circle the three assumptions that would change its recommendation if wrong.

Where a simulation fits

The Investment Banking Simulation requires teams to forecast companies, complete DCF models, upload models and use outputs in bids and approval memoranda. It is a strong later test of model discipline under time pressure.

Where it leads

Forecasts create the forward-looking inputs students need for relative and intrinsic valuation.

Central question: Which public companies are truly comparable, and how should bankers turn market multiples into a defensible valuation range?

Comparable company analysis teaches judgement about business similarity, financial profile and market conditions. The arithmetic is simple; the difficult work is selecting peers, normalising metrics, choosing the relevant multiple and explaining why a target should trade above or below the peer range.

What this concept covers

• Peer selection by business model, geography, growth, margins, scale and capital intensity.
• Enterprise-value and equity-value multiples.
• LTM versus NTM metrics and calendarisation.
• Benchmarking growth, margins and returns.
• Premium or discount reasoning and football-field presentation.

Learning outcomes

• Select a defensible peer group.
• Calculate and interpret core trading multiples.
• Apply peer multiples to target metrics.
• Defend a valuation range and explain peer limitations.

How to teach it

• Give eight possible peers and require students to include only four.
• Have teams justify one exclusion before showing any valuation.
• Compare median, quartile and selected-multiple approaches.

Case-style example

Sable Software has £52 million of NTM EBITDA. Five listed peers trade at 10.0x, 11.5x, 12.0x, 13.8x and 15.2x NTM EBITDA. Sable grows faster than the first two peers but has lower margins than the top two. Students calculate enterprise value at the median and a selected 12.5x-13.0x range, then defend whether the premium is earned. Students discover that peer selection matters more than decimal precision.

Where students struggle

Students select peers because they share a sector label. Require them to explain operational and financial comparability before accepting a multiple.

Reading and a quick check

Set Rosenbaum and Pearl Chapter 1. Quick check: ask students to remove one peer and explain how that decision changes the valuation narrative, not only the median.

Where a simulation fits

The IPO Simulation uses comparable company valuation, and the Investment Banking Simulation asks students to compare valuation approaches within broader deal work. Use either only after peer-selection logic is secure.

Where it leads

Trading comps show what public markets value today; precedent transactions show what acquirers have paid for control.

Central question: What can previous acquisitions tell us about control value, and when do deal multiples mislead?

Precedent transactions connect valuation to actual control deals. Students learn to identify relevant transactions, calculate implied enterprise and equity values, understand premiums, and control for market cycle, strategic synergies, deal structure and information quality.

What this concept covers

• Selection of comparable acquisitions and transaction date relevance.
• Purchase consideration, assumed debt and enterprise-value calculation.
• LTM transaction multiples and premiums paid.
• Synergy, control premium and market-cycle effects.
• Public filing sources and limitations of announced deal data.

Learning outcomes

• Select comparable transactions for a target.
• Calculate transaction multiples and premiums.
• Distinguish control value from standalone trading value.
• Explain why an old or strategically unusual deal may be a poor precedent.

How to teach it

• Give students six deals across different years and ask them to select three.
• Require a short note on why the highest multiple should or should not anchor valuation.
• Compare a strategic buyer precedent with a financial sponsor precedent.

Case-style example

Harbour Medical is being sold. Three recent sector deals imply 11.0x, 12.5x and 15.8x LTM EBITDA. The 15.8x deal included £25 million of disclosed annual synergies and occurred during a market peak; Harbour has £18 million of EBITDA. Students value Harbour using all three deals, then exclude or adjust the high precedent and defend the change. Students discover why transaction context can dominate mechanical averaging.

Where students struggle

Students treat every completed deal as clean market evidence. Ask what the buyer expected to own, what synergies were available and what market conditions prevailed at announcement.

Reading and a quick check

Set Rosenbaum and Pearl Chapter 2 and pair it with Guo, Liu and Tu (2023) on peer choices in merger valuations. Quick check: ask which precedent should receive the least weight and why.

Where a simulation fits

The M&A Simulation is a later application once students can distinguish standalone value, transaction value and negotiation terms.

Where it leads

Relative methods establish market anchors. DCF asks what the company is worth from its own cash flows and assumptions.

Central question: How should a banker build a DCF and reconcile it with trading and transaction evidence?

DCF is central to investment banking because it forces assumptions about operating performance, cash conversion, cost of capital and terminal value into one framework. The teaching emphasis should be on assumption quality, sensitivity and triangulation rather than on producing one mathematically exact answer.

What this concept covers

• Unlevered free cash flow and forecast period.
• WACC, CAPM inputs and capital structure assumptions.
• Terminal value using perpetuity growth and exit multiples.
• Enterprise value to equity value bridge.
• Sensitivity tables and football-field triangulation with comps and precedents.

Learning outcomes

• Construct or review an unlevered DCF.
• Explain and defend WACC and terminal-value assumptions.
• Bridge enterprise value to equity value correctly.
• Triangulate DCF, trading comps and precedents into a valuation range.

How to teach it

• Make students calculate a DCF from a short forecast rather than start with a finished spreadsheet.
• Require a two-way WACC/terminal multiple sensitivity table.
• Have teams explain why their selected range is not simply the midpoint of three methods.

Case-style example

Vantage Payments generates £28 million of 2026 unlevered free cash flow, forecast to grow 8%, 7%, 6% and 4% over four years. Students value the company at 9.0%-10.0% WACC and a 10.0x-12.0x exit EBITDA range, then reconcile this with trading comps at 13.0x and precedents at 14.5x. One team argues the DCF is conservative; another says market multiples price strategic scarcity. Students discover that triangulation is a judgement call.

Where students struggle

Students hide uncertainty inside WACC or terminal value. Require them to state what economic story justifies the selected terminal assumptions and show how the range changes under a realistic downside.

Reading and a quick check

Set Rosenbaum and Pearl Chapter 3. Quick check: ask students to identify whether the largest valuation risk sits in operating forecasts, discount rate or terminal value, and show one calculation.

Where a simulation fits

The Investment Banking Simulation uses DCF, FCFF-based fairness work, enterprise value decisions and uploaded models. This is one of its strongest concept fits.

Where it leads

With valuation methods in place, students can move into the advisory process where value becomes a live client decision.

Central question: How does an investment bank turn a strategic objective into a controlled M&A process?

M&A advisory is where investment banking becomes a process discipline. Students need to understand client objectives, buyer or target screening, auctions, negotiated sales, information memoranda, management presentations, due diligence, bids, exclusivity and closing risk.

What this concept covers

• Buy-side and sell-side mandates and incentives.
• Strategic rationale, target or buyer screening and valuation framing.
• Auction versus negotiated sale.
• CIMs, teasers, NDAs, data rooms, management presentations and bid rounds.
• Process control, confidentiality, certainty, timing and competitive tension.

Learning outcomes

• Design a basic sell-side or buy-side process.
• Connect strategic rationale to buyer selection and valuation.
• Explain how information release affects competitive tension and confidentiality.
• Identify process risks that can destroy value or certainty.

How to teach it

• Run a mini-auction with three buyers and one seller group.
• Ask one team to design a broad auction and another a targeted process for the same company.
• Debrief value maximisation versus confidentiality and certainty.

Case-style example

Oak & Finch Foods has EBITDA of £42 million and three plausible buyers: a global strategic with £12 million of estimated synergies, a regional strategic with £6 million, and a sponsor targeting 18% IRR. The board wants at least £500 million but fears customer leakage. Students design a sale process, buyer list and information-release plan. Students discover why the process that maximises competitive tension may not maximise certainty or confidentiality.

Where students struggle

Students jump from valuation straight to final price. Keep asking: what information is known at each stage, who sees it, and what does the adviser do next?

Reading and a quick check

Set Rosenbaum and Pearl Chapter 6 for sell-side M&A and Chapter 7 for buy-side M&A. Quick check: ask students to choose auction or negotiated sale for the case and give three reasons.

Where a simulation fits

The M&A Simulation fits directly after this concept. Students work in paired Seller and Buyer teams, model the transaction and negotiate the five linked inputs - EBITDA, adjustments, synergies, valuation multiple and cash-versus-shares mix - before comparing outcomes.

Where it leads

The process leads into the harder question of how price, consideration, synergies and protections should be structured.

Central question: A deal can look strategically attractive and still destroy value. How should bankers test price, funding, synergies and protection terms together?

This concept joins M&A valuation to transaction structure. Students evaluate cash versus shares, exchange ratios, financing, accretion and dilution, synergy assumptions, earnouts, completion risk, fairness analysis and how terms allocate uncertainty between buyer and seller.

What this concept covers

• Cash, stock and mixed consideration.
• Exchange ratios, ownership outcomes and accretion/dilution.
• Synergy valuation, timing, cost to achieve and double counting.
• Earnouts, escrow, conditions and selected deal protections.
• Fairness analysis and the limits of financial opinions.

Learning outcomes

• Compare cash and stock consideration from both sides.
• Quantify basic accretion/dilution and synergy requirements.
• Identify when headline valuation overstates economic value.
• Defend a structured offer under uncertainty.

How to teach it

• Give teams the same valuation but different financing constraints.
• Have one group represent buyer CFO, one target board and one adviser.
• Require a final offer with price, consideration mix, synergy assumptions and one protection mechanism.

Case-style example

Helix Media can acquire StreamWorks for £720 million. Helix trades at 14x earnings; StreamWorks at 18x. A cash offer costs 6.5% after-tax financing; a share offer would issue 22 million new shares. Management claims £28 million of annual pre-tax synergies, but only £16 million is supported. Students compare cash and stock, test accretion/dilution and decide how much synergy to credit. Students discover that structure can reverse a valuation conclusion.

Where students struggle

Students treat synergies as free value and consideration as a funding afterthought. Make them identify who bears market, execution and integration risk under each structure.

Reading and a quick check

Use Rosenbaum and Pearl Chapter 7 and Guo, Liu and Tu (2023). Quick check: ask what minimum synergy level makes the buyer case defensible and what assumption could invalidate it.

Where a simulation fits

The M&A Simulation is the strongest fit. The Investment Banking Simulation also reaches fairness opinions and transaction decision-making in later rounds.

Where it leads

After advisory and M&A execution, the course moves to equity capital markets, where valuation must be translated into investor demand and allocation.

Central question: How do underwriters turn a private company into a public offering, and why is the right IPO price not simply the highest possible price?

IPO teaching should link equity story, valuation, offer structure, roadshow feedback, book building, pricing and allocation. Students should see that issuers, underwriters and investors have different objectives and that price, demand, proceeds and aftermarket performance must be balanced.

What this concept covers

• IPO readiness, equity story and key participants.
• Comparable company valuation and offer range.
• Primary versus secondary shares and proceeds.
• Roadshow, indications of interest, book building and price discovery.
• Final pricing, allocation, underpricing and aftermarket considerations.

Learning outcomes

• Assess whether a company is IPO-ready.
• Build a defensible initial offer range.
• Interpret investor demand in book building.
• Recommend final price and allocation while explaining trade-offs.

How to teach it

• Give students a price-demand curve and ask them to choose the final price.
• Split the class into issuer, underwriter and investor perspectives.
• Debrief why a maximised issue price can damage allocation quality or aftermarket performance.

Case-style example

Arcadia Health plans to sell 20 million shares. Investor demand is 42 million shares at £12, 31 million at £13, 22 million at £14 and 13 million at £15. Comparable valuation supports £13-£15. Students choose a final offer price, calculate proceeds and oversubscription, then allocate 70% to long-only funds or 45% to them in a more diversified book. Students discover that pricing and allocation are joint decisions, not separate steps.

Where students struggle

Students assume underpricing always means failure. Force them to discuss issuer proceeds, investor participation, aftermarket trading and repeat capital-market access.

Reading and a quick check

Set Rosenbaum and Pearl Chapters 8 and 9 plus Huang, Ritter and Zhang (2023). Quick check: ask students to price a small demand book and explain one reason to stop below the maximum clearing price.

Where a simulation fits

The IPO Simulation fits directly. Underwriter teams value one of three companies, set an initial range, run roadshows, interpret bids, set the final offer price and allocate shares while investor teams value, question and compete for allocation.

Where it leads

Equity is one route to capital. The next concept examines debt financing and the underwriting trade-offs in DCM and leveraged finance.

Central question: How should bankers size and structure debt when borrower flexibility and lender protection pull in opposite directions?

Debt capital markets and leveraged finance teach a different form of underwriting judgement. Students should connect cash flow and leverage to amount, pricing, maturity, amortisation, seniority, security and covenants, then recognise how market conditions and investor demand affect what can actually be raised.

What this concept covers

• Debt capacity, leverage and coverage.
• Loan and bond terms: pricing, maturity, amortisation, seniority and security.
• Covenants, guarantees and structural subordination.
• Refinancing, bridge facilities and acquisition financing.
• Underwriter relationships, pricing formation and investor demand.

Learning outcomes

• Estimate a sustainable debt amount.
• Compare alternative financing packages rather than single terms.
• Explain lender protections and borrower flexibility.
• Recommend a financing structure under base and downside cases.

How to teach it

• Give borrower and lender teams the same company but different objectives.
• Make them negotiate a complete package rather than only interest rate.
• Introduce a downside EBITDA shock before final agreement.

Case-style example

Beacon Software has £48 million adjusted EBITDA and £120 million existing net debt. Management wants a new £180 million facility. Lenders quote 6.25% for £150 million with 4.0x leverage covenant, or 7.0% for £180 million with tighter security and 3.75x covenant. Students calculate leverage, interest burden and headroom under EBITDA falling to £40 million. Students discover that more proceeds can reduce strategic flexibility enough to outweigh the funding benefit.

Where students struggle

Students focus on coupon or leverage in isolation. Require them to read amount, price, maturity, repayment, security and covenant package together.

Reading and a quick check

Use the leveraged-finance sections in Rosenbaum and Pearl Chapter 4, plus Wang (2021), Dick-Nielsen et al. (2021) and Garrett (2024). Quick check: ask which financing package survives a 15% EBITDA downside.

Where a simulation fits

The Debt Financing Simulation is a direct fit: lender and borrower teams negotiate a complete refinancing package using company, financial and market evidence. The Investment Banking Simulation also incorporates DCM terms across multiple rounds.

Where it leads

Debt structure feeds directly into LBO analysis, where acquisition price, debt capacity and sponsor returns interact.

Central question: How do bankers test whether a leveraged acquisition can support its debt and still deliver an acceptable equity return?

Bankers need to understand LBOs because sponsor buyers, leveraged finance desks and sell-side processes all use the framework. The teaching focus is not simply IRR. Students should connect purchase price, debt capacity, operating case, cash sweep, exit multiple and downside resilience.

What this concept covers

• Sources and uses and sponsor equity.
• Debt tranches, cash interest and mandatory amortisation.
• Operating model, free cash flow and debt paydown.
• Exit enterprise value, equity proceeds, MOIC and IRR.
• Sensitivity to purchase price, leverage, growth and exit multiple.

Learning outcomes

• Build or interpret a basic LBO model.
• Identify the main drivers of sponsor return.
• Test debt capacity under downside conditions.
• Explain when a high IRR reflects aggressive assumptions rather than strong economics.

How to teach it

• Start from a one-page sources-and-uses schedule before full modelling.
• Require a return bridge showing contribution from EBITDA growth, deleveraging and multiple movement.
• Ask students to state a walk-away price before seeing competitor bids.

Case-style example

Redwood Services has £60 million EBITDA. A sponsor can buy it for 10.0x EBITDA using 5.5x debt at 7.5% cash interest. EBITDA grows 5% annually and the base exit is 10.0x after five years. Students calculate sponsor equity, approximate debt paydown and return, then rerun at 3% growth and 8.5x exit. One team still bids aggressively; another cuts price. Students discover how quickly downside compresses equity returns.

Where students struggle

Students optimise to an IRR target and back-solve a price without asking whether the operating and financing case is credible. Mark assumption discipline as heavily as model accuracy.

Reading and a quick check

Set Rosenbaum and Pearl Chapters 4 and 5. Quick check: ask students to show which of entry price, leverage, EBITDA growth or exit multiple contributes most to the return.

Where a simulation fits

The LBO Simulation fits after this concept. Students take sponsor, lender and sell-side roles and must connect valuation, debt structure, bids and return targets in a competitive process.

Where it leads

The final concept asks what bankers do when financing no longer works, and how conflicts, ethics and professional judgement shape restructuring advice.

Central question: What changes when the original financing case breaks, multiple stakeholders have competing claims and the adviser must remain credible?

Investment banking courses should finish with downside and conduct rather than with a successful closing. Distress makes capital structure, stakeholder incentives, conflicts, fairness and disclosure concrete. It also creates a natural place to assess professional judgement when data is incomplete and client pressure is high.

What this concept covers

• Financial distress, liquidity shortfalls and covenant pressure.
• Priority of claims, security, recoveries and restructuring options.
• Amend-and-extend, haircut, debt-for-equity, asset sale and new-money choices.
• Advisor conflicts, fairness, confidentiality and professional conduct.
• Decision logs, evidence, challenge and communicating uncertainty.

Learning outcomes

• Map claims and bargaining positions in a distressed capital structure.
• Calculate basic recoveries and identify value transfer.
• Recommend a restructuring pathway.
• Identify conflicts and defend an ethically credible advisory response.

How to teach it

• Map the capital structure on the board before allowing negotiation.
• Give teams different stakeholder claims and a common enterprise value.
• Add a late piece of negative information and require a revised recommendation.

Case-style example

TransitCo has £260 million enterprise value against £180 million first-lien debt, £120 million second-lien debt and equity. A new investor offers £40 million only if first lien extends maturity and second lien converts half its claim to equity. Students compute recoveries under liquidation and the proposal, then negotiate a recommendation. Lien 1 may prefer certainty; Lien 2 may gamble on upside. Students discover that the same valuation supports different rational positions because claim priority changes incentives.

Where students struggle

Students search for one “correct” deal. In restructuring, negotiation power, legal priority, liquidity and alternative outcomes can make multiple positions defensible. Assessment should reward reasoning and evidence, not convergence.

Reading and a quick check

Use a current restructuring technical note plus Garrett (2024) for conflicts and professional incentives. Quick check: ask each student to state which stakeholder bears the marginal loss under a £20 million lower enterprise value.

Where a simulation fits

The Debt Restructuring Simulation is a direct final-session fit. The Investment Banking Simulation also ends with fairness opinions and a restructuring involving first-lien, second-lien and equity positions.

Where it leads

This closes the lifecycle. Students should now be able to move from client problem and accounting evidence through valuation, advisory, capital markets, financing and downside judgement.

10-week course structure

Compress without losing the transaction lifecycle. Combine accounting with mandate framing, combine valuation methods, and use the strongest simulations as integrated sessions rather than separate add-ons.

14-week course structure

Use the extra sessions to separate modelling and valuation methods, give M&A its own application week and create more space for simulation debrief, revision and individual defence.

The Investment Banking Simulation is the closest direct fit for this course. Finsimco describes it as a 16-32 hour, web-based, team-based simulation delivered across four linked rounds and a 20-year company lifecycle. Students move through changing transaction responsibilities rather than repeating one isolated exercise.

Why it fits here

It connects topics that are often taught separately: financial statement analysis, forecasting, DCF valuation, debt financing, derivatives, buy-side advisory, sell-side advisory, fairness opinions and restructuring. Because decisions in one round feed later responsibilities, it works as a capstone once students have the technical base.

What students do

• Round 1: lender teams propose debt packages while PE teams model Frametastic and Star Hotel, select financing and submit enterprise-value bids.
• Round 2: lenders add detailed debt terms and derivatives conditions; sell-side teams prepare pitches, conduct roadshows, manage the data room and respond to information requests; PE teams update models and Approval Memoranda.
• Round 3: teams work across DCM, derivatives, buy-side and sell-side advisory, acquisition and divestiture tasks.
• Round 4: teams prepare FCFF-based fairness opinions and negotiate a debt restructuring involving first-lien, second-lien and equity positions.
• After each round, teams review transaction outcomes, comparative performance and feedback before the next stage.

Recommended course placement

• Use selected early rounds after Sessions 2-5 if you want staged application.
• Use the full simulation across several sessions in a 12- or 14-session course.
• Use final outputs before a group advisory memo or individual oral defence.
• Do not position it inside one normal two-hour class: the live page states 16-32 hours and recommends intensive or multi-session delivery.

Knowledge students should have before the simulation

• Basic finance and discounted cash flow valuation.
• Financial statement relationships and basic forecasting.
• Enterprise value, equity value and net debt.
• A first pass at debt capacity, valuation and advisory roles.

Delivery format

Suggested debrief questions

• Which model assumption most changed an enterprise-value bid or financing choice?
• Where did role-specific incentives create different but defensible decisions?
• What did the platform outcome reveal that the model did not?
• How did financing terms affect acquisition attractiveness?
• What would you change in the Approval Memorandum after seeing the result?
• How should a fairness opinion differ from a bid recommendation?
• What earlier financing choice mattered most when the case reached restructuring?

The platform records team decisions, submitted work and comparative outcomes. That evidence supports your academic judgement; it does not replace it, and it does not establish which individual student made which argument.

The M&A Simulation is a short, role-based acquisition negotiation built around Kestrel Security and Meridian Cloud. The live Finsimco page describes a 1-2 hour activity with paired Seller and Buyer teams of 3-5 students. Teams model the transaction, form opening positions, negotiate five linked inputs and compare how different groups structured the same deal.

Why it fits here

By Session 7 students already know valuation, process and deal structure. The simulation can therefore focus on the difficult part: deciding which terms matter, what to concede and when a seemingly attractive headline price becomes a poor overall deal.

What students do

• Review the Kestrel Security and Meridian Cloud transaction context, company information, financial evidence and role-specific material.
• Model EBITDA, proposed adjustments, synergies, the valuation multiple and the cash-versus-shares position.
• Negotiate the five linked transaction inputs: EBITDA, adjustments, synergies, valuation multiple and cash-versus-shares mix.
• Revise positions as new information affects the transaction and decide whether the evidence still supports completing the deal.
• Review results by role and compare how similar teams reached different outcomes.

Recommended course placement

• At the end of Session 7 after M&A valuation and deal-structure teaching.
• Inside a two-hour class with a separate pre-read and a short debrief.
• Before a written buy-side or sell-side recommendation so students can convert negotiated terms into analysis.

Knowledge students should have before the simulation

• Basic company valuation and enterprise value.
• Strategic rationale and synergy logic.
• Cash, stock and mixed consideration.
• Core differences between buyer and seller objectives.

Delivery format

Suggested debrief questions

• Which term created the largest value transfer between buyer and seller?
• Did the final enterprise value remain consistent with your valuation analysis?
• How much synergy did the buyer effectively pay away?
• Which concession improved completion certainty?
• How did new information change bargaining power?
• Would your written fairness or recommendation conclusion differ from the negotiated outcome?

Use the final negotiated terms as evidence for discussion and written assessment, not as an automatic academic grade.

Grading with the Investment Banking Simulation

Students work across a four-round, 16-32 hour transaction lifecycle involving financial analysis, DCF, DCM, derivatives, buy-side and sell-side advisory, fairness opinions and restructuring.

• Forecast and model quality, including normalisation, valuation consistency and checks.
• Approval Memoranda and whether recommendations follow from the model.
• Role-specific judgement and response to new information.
• Transaction inputs such as financing terms and enterprise-value bids.
• Individual defence or reflection assigned outside the platform.

Grading with the M&A Simulation

Paired Seller and Buyer teams model a target and negotiate EBITDA, adjustments, synergies, valuation multiple and cash-versus-shares mix.

• Valuation discipline before negotiation.
• Quality and consistency of the five linked transaction inputs.
• Use of financial evidence, synergy assumptions and valuation logic.
• Negotiation rationale, concessions and whether a no-deal outcome was defensible.
• Post-simulation memo comparing planned and achieved terms.