How To Write A Pitch Deck
The process of constructing a pitch deck in a sell-side investment bank is quite a sight to witness. Usually, the majority of the pages are just lifted from an already-existing book with the names and financials changed. 80% of the work usually takes about 20% of the time with the rest of it being the details like:
- Various iterations and changes from senior bankers
- Make sure footnotes show the correct dates
- Make sure that all share prices and financial data are updated to the same date / fiscal quarter.
Add Value With The Macro View But Keep It Concise
Imagine you’re a client on the receiving end of a beauty parade from investment banks all pitching the same deal, or in the case of the UIBS competition, a judge having to sit through the same fictional M& A transaction. Every pitchbook will set the scene with a macro view of the industry. It can get repetitive.
“There are two things you need to do here. Really understand the market and which financials make sense as a comparison or which can provide an accurate macro view. In other words, research the industry and keep it relevant,” says Nourrissat. “And then, of course, make sure everything is spot on. Any typos or mistakes will completely undermine your credibility.”
Here’s a snapshot from the Aer Lingus pitchbook:
Components Of A Pitch Deck
A pitch deck should contain the most important information to convince an investor, client or partner. So there should not be too many texts, but limit yourself to the most important points. There are 10 important elements that belong in every deck.
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How Is The Pitch Delivered
In most cases, the pitch book is delivered in person at the banks or corporate clients office by senior members of the investment banking team. The managing director, who has a relationship with the client, will typically lead the meeting, and other bankers may have smaller roles as well. If junior members of the team like analysts or associates attend, they usually dont say anything and take notes or are prepared to dig up any additional information thats required.
What Is Included In An Investment Banking Pitch Book
Typically, a pitch deck is divided into five sections based on whether it is being presented to a potential corporate client or investor:
Although there can be many more topics covered such as investment highlights, key financial figures, the company’s core customers and diversification of the customer base, barriers to entry for competitors, these are the five primary topics that encompass almost all of what is typically included in most pitch decks.
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Why Do You Spend So Much Time On Investment Banking Pitch Books As A Junior Banker
Not all pitch books take days or weeks to complete shorter ones might require only a few hours of work.
But they can easily spiral into never-ending projects that require all-nighters and extraordinary effort to finish, resulting in those legendary investment banking hours.
Thats because of:
Equity Pitch Book And Debt Pitch Book Examples For Financing Mandates
In financing mandates for equity, debt, and even restructuring deals there are a few major differences compared with the investment banking pitch books described above:
For example, if youre pitching an IPO, you might show the range of multiples at which the company could go public, the range of proceeds it might receive, and how its value might change after the deal.
In a debt deal, youll show the credit stats and ratios for the company under different scenarios, such as Term Loans vs. Subordinated Notes, and explain which one is best based on that.
For more examples, please see the articles on ECM, DCM, and Restructuring.
Also, see our coverage of IPO valuation models and debt vs. equity analysis:
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Mcmoran Merger With Freeport To Create Freeport
Evercore served as M& A advisor to McMoRan in the evaluation of McMoRans merger with Freeport to create Freeport-McMoRan. Evercores fairness presentation gives a pretty good overview of their valuation approach. The two November presentations also give a very good overview of how to think about valuing a natural resources business.
Types Of Investment Banking Pitch Books
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#1 Main PitchBook
These types of pitch books include all the details and information about the investment banking firm. Also, the statistics related to recent deals, profits, successful investments, recent trends, and deals in the market are demonstrated in the pitch book. Hence such a pitch book needs to be updated regularly.
Contents
- Organization details- This contains slides, which display the organization details of the respective investment bank, like its vision and mission statement, history, global presence, key management personnel, and size of the company.
- Deals & Client Lists- Further, it also contains information about the recent deals, sector-specific client list as well as the services provided to them.
- It may also contain slides portraying the firms ranking as compared to competitors.
- This will also include important aspects of the market overview, such as competitors performance, current trends & deals in the market.
#2- Deal pitch book
It is created specifically for a particular deal. Such a presentation demonstrates how the investment bank can specifically cater to their clients financial and investing needs.
Contents
#3- Management Presentations
Contents of a Management Presentation:
#4- Combo / Scenario Analysis
#5- Targeted Deal PitchBook
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How Do You Make A Pitchbook
Now that we’ve seen the most critical details in a pitchbook let’s discuss how to make one. As we’ll see later in this article, there are other tools, such as pitch decks that you can use to approach investors. These tend to be more along the lines of concise content, whereas a pitchbook relies on having more detailed information. So, it’s not unusual to find the same information but with different levels of detail.
A pitchbook includes your startup’s vision, mission, company overview, and business model. That’s standard information for most pitch decks or books, and then there’s this information:
- Liquidity analysis
- Valuation overview and analysis
What Is Pitch Books In Investment Banking
PitchBook is an information layout or presentation that the investment banks use, business brokers, corporate firms, etc. that provides the firms main attributes and valuation analysis, which help the potential investors to decide whether they should invest in the business of the client or not and also this information is known as Confidential Information Memorandum which the sales department of the firm uses to help them sell products and the services to attract new clients.
Investment Banking Pitchbook is the word most dreaded by the Analysts and Associates in any investment bank. I must tell you that making a Perfect Pitchbook lies the secret behind bagging those million-dollar deals. And that is why Investment Bankers work for a hundred hours a week.
If you happen to go through the Typical day of an Investment banker, you will notice how they work day and night, putting all the numbers together for the perfect Pitches.
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How A Pitch Book Is Created
The pitch book creation typically involves senior managers, mainly, the managing director and VP. First, these senior managers draw the outline of the pitch book attributed to a financial solution that the client is seeking. The outline is then passed to the associates and analysts for analysis.
The critical part is to ensure that recent industry data is used to prepare the pitch book. This is imperative not only to persuade the client but also beat the competition in the industry. The pitch book usually goes through several iterations to achieve perfection.
Contents Of A Sample Management Presentation
- Since this type of pitch book is created for current clients rather than potential clients, it contains less quantitative data and is customized to be more client-specific.
- It focuses more on client company details, such as company highlights, products, and services, market overview, its customers, organizational chart, financial performance & growth prospects.
- Such presentations are made after thorough interaction with the client and regular feedback sessions.
Now let us study the art of writing a pitch book by using an investment bank pitch book example
Assuming you are an Investment Banker and need to create a pitch book for a new client highlighting your firm’s critical competencies.
The first thing you need to remember is that the pitch book is like a salesman for your organization.
It needs to be immaculate, and professional, and at the same time, it should be convincing.
Then when you get to write the pitch book, I would like you to remember the following things and incorporate them into your pitch book format:
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Sale Of Focus Media To Private Equity Consortium
J.P. Morgan served as sell-side M& A advisor to Focus Medias Special Committee. The firm was engaged to evaluate a take-private proposal it had received from a private equity consortium, consisting of Focus Medias CEO & Chairman along with various private equity firms.
What Is The Pitch Process
A pitch is an investment banks sale presentation of its products and services to existing and potential clients. A bank usually bids for a transaction in competition with other financial institutions, so whether or not the bank is commissioned really depends on the pitch and how it is delivered. The final document that results from the pitch process and is ultimately presented to clients is called a pitch book.
Normally, the pitch process starts with a managing directors pitch idea for a clients need. Then most of the analysis and compiling of the pitch book is done by the junior members of the team, especially the analysts. The pitch book contains presentation of the investment banks rankings and capabilities, analysis of the current market conditions, and analysis of the specific transaction that the client wants to effectuate.
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Whats Included In An Investment Banking Pitch Book
Here is an example outline for an investment banking pitch book:
Qatalyst Pitchbook On Autonomy To Oracle
We separated the following pitchbook out since the context of this document is actually controversial.
Oracle made it available to the world claiming they received the deck when Qatalyst, acting as Autonomys advisor, pitched Autonomy to Oracle.
Qatalyst and Autonomy, however, dispute this claim, with Qatalyst saying they were acting not as Autonomys advisor but rather pitching ideas to Oracle to win a buy-side mandate. With that, heres the deck.
The nature of the feud is interesting as it sheds light on how investment banking pitches are presented to clients, so I recommend everyone read the dealbreaker article below.
Frank Quattrone
Frank Quattrone Probably Didnt Want Everyone To See This Particular Pitchbook
People who have real jobs are sometimes surprised to learn how much of investment banking consists of hopeless pitching. Your team puts together a forty-page slide deck with sixty pages of appendices, proofreads it repeatedly, updates numbers every day for two weeks, and prints a dozen glossy spiral-bound copies. Then you lug them halfway across the continent, slog through the first five pages with an increasingly bored potential client, are politely rebuffed, and then cleverly ask hey do you want any extra copies of the presentation for your colleagues? so you dont have to carry them back on the plane. Glamorous work.
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How Is The Pitch Book Actually Made
The pitch book is a collaboration between junior and senior bankers, with most of the actual work being done by investment banking analysts and associates.
Typically, a managing director will sit down with a director or VP to create an outline of the pitch book. Then the VP or director will wireframe the structure of the pitch and have the associate work with the analyst to crunch all the numbers and create all the analysis used to populate the presentation.
The process can take anywhere from a couple of days to a few weeks, depending on the clients timeline and how busy the team is. The process usually requires a high number of iterations with many drafts or versions of the pitch often late at night and over the weekend.
Contents Of A Sample Deal Pitch Book
- This book contains slides on specific details that make your firm look attractive and efficient. You may support this data with graphs showing the market growth rate, the firm’s positioning overview, and valuation summary, thus making a bold representation of the firm’s potential to serve the client.
- Depending on whether you are making a pitch report for M& A or IPOs, the deal-pitch book shall include not only a list of potential buyers, or possible acquisition candidates and financial sponsors, but also their detailed descriptions.
- The deal pitch book needs to be appended with relevant financial models, graphs, statistics, and league tables wherever necessary.
- And lastly, it summarizes the proposal and provides advice & recommendations, the bank’s role and contribution in attaining the client’s goals and timelines.
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Industry Update And Peer Benchmarking
This will speak to the key metrics in the industry. Oil and gas companies will be shown total production and supply. Consumer companies may see charts on consumer confidence and spending. Banks will also show how comparable companies are doing in terms of trading multiples and what may have affected certain companies via case studies.
There may also be summaries on what third party or internal research analysts have been saying.
In equity, this will show where companies are trading on an EV/EBITDA basis or whatever industry relevant multiple determines pricing. If leverage is high and assets are in the middle, the bank has to find the closest comps as a starting point to see where the client would price if they were to transact.
For debt, banks will show the yield versus comparable companies and this becomes more difficult as a single company where equity is fungible and homogenous may have multiple tranches of debt with different characteristics. 2020 notes are not the same as 2024 maturities. Tenor, security and other factors will have to be married with industry stats to get to a reasonable starting point.
If a client is weak relative to industry peers, this becomes a tricky mandate because the banker cannot offend the client but also has to be realistic on where the deal will price.
By Step Guide To Creating An Investment Banking Pitchbook
Let us first see one sample PitchBook Example
#1 Capabilities and Qualifications of the Investment Bank
- In this section, the Investment Bank will stress why they are the best in the industry.
- The information about how they rank concerning their competitors regarding the products and services will be given here.
- In comparison to other Investment Banks firms, this ranking table is known as the league table rankings.
#2 Market Updates
This section gives the client information about the current market trends and the environment.
- Why this section has so much importance as in market turmoil, clients seek the Investment Banks thoughts on the direction of the market or the optimal time to do a transaction.
Investment banks need to have a smart perspective about the market situations.
#3- Transaction Section
This section gives the client the banks perspective on the following:
- Potential buyers and sellers in Mergers and Acquisitions
- Amount of capital that can be raised and its pricing
- Timing and Process for the transactions
- Valuations for sale or acquisition targets
The following is the primary analysis that you may find in the Transaction section:
a) Comparable Analysis
b) Financial Model
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