Pitch Book
Encyclopedia
A pitch book is a marketing
device used by investment banks around the world. It consists of a careful arrangement and analysis of the investment considerations of a potential or current client, and/or a reference for comparison for an employee in an investment or commercial bank. Its purpose is to secure a deal for the investment bank with the potential client.
Business in the investment banking community is conducted with an initial pitch or sales introduction
. Investment banking, traditionally considered being the more formal form of sales
. Institutional vs. individual, investment banking lends itself to be the former of the two in a tailored and highly effective sales
strategy. Adhering to a firm commitment underwriting, the investment bank, is a participant and managing member of an offering. The other methods of banking, which involve less commitment, are either a best efforts underwriting or "standby" commitment.
Bulge bracket, now full-service investment banking conglomerates, will compete to win the business of an established client as either lead or co-manager of a syndicate. If a firm is less established, the firm, and not the investment bank, will make the pitch to secure the relationship. The founders and management of the business can do this through marketing a business plan or private placement structured. (See Regulation D) of the United States Securities Act of 1933
The pitch book is indigenous to the investment bank doing the same, marketing itself to its clients. It is a chance to show and prove why an investment bank should be considered amongst the wide variety of financing and other sources of capital and considerations in the financial marketplace, not limited to debt and equity cost comparison and structures.
The pitch book is not to be confused with a public information book ("PIB"), which is an internal resource for the investment bankers to glean transactional and historic information of the intended industry a particular target firm may be in or may be heading towards. The PIB is an easy to access research source, which is usually maintained in the library of an investment bank.
The pitch book may employ a SWOT analysis
(Strengths, Weaknesses, Opportunities, and Threats). "Comps", or Comparable Company Analysis may also be presented. In a comp, an investment bank will present industry specific details, trends, macro- and microeconomic and company specific analysis, which will not only support the investment bank's vision but also support reasoning for a particular future valuation discussion for the potential client.
There are many contributors to an investment bank's pitch book. It starts with the analyst to the associate to the vice-president and senior vice-president (relationship managers) to the lead of the team, the managing director. As an example, a table of contents or outline will open the pitch book for discussion. Name, title, and department present a management description of the deal team and other contributors within the firm’s internal wealth of resources. An "overview", "financing requirements (such as satisfying capital expenditures "CAPEX" and capital budgeting)", and finally as mentioned a description of the company's universe, the "comparable company analysis" are all essential elements to an investment banking pitch book.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
device used by investment banks around the world. It consists of a careful arrangement and analysis of the investment considerations of a potential or current client, and/or a reference for comparison for an employee in an investment or commercial bank. Its purpose is to secure a deal for the investment bank with the potential client.
Business in the investment banking community is conducted with an initial pitch or sales introduction
Sales pitch
In selling technique, a sales pitch is a line of talk that attempts to persuade someone or something, with a planned sales presentation strategy of a product or service designed to initiate and close a sale of the product or service....
. Investment banking, traditionally considered being the more formal form of sales
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
. Institutional vs. individual, investment banking lends itself to be the former of the two in a tailored and highly effective sales
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
strategy. Adhering to a firm commitment underwriting, the investment bank, is a participant and managing member of an offering. The other methods of banking, which involve less commitment, are either a best efforts underwriting or "standby" commitment.
Bulge bracket, now full-service investment banking conglomerates, will compete to win the business of an established client as either lead or co-manager of a syndicate. If a firm is less established, the firm, and not the investment bank, will make the pitch to secure the relationship. The founders and management of the business can do this through marketing a business plan or private placement structured. (See Regulation D) of the United States Securities Act of 1933
The pitch book is indigenous to the investment bank doing the same, marketing itself to its clients. It is a chance to show and prove why an investment bank should be considered amongst the wide variety of financing and other sources of capital and considerations in the financial marketplace, not limited to debt and equity cost comparison and structures.
The pitch book is not to be confused with a public information book ("PIB"), which is an internal resource for the investment bankers to glean transactional and historic information of the intended industry a particular target firm may be in or may be heading towards. The PIB is an easy to access research source, which is usually maintained in the library of an investment bank.
The pitch book may employ a SWOT analysis
SWOT analysis
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture...
(Strengths, Weaknesses, Opportunities, and Threats). "Comps", or Comparable Company Analysis may also be presented. In a comp, an investment bank will present industry specific details, trends, macro- and microeconomic and company specific analysis, which will not only support the investment bank's vision but also support reasoning for a particular future valuation discussion for the potential client.
There are many contributors to an investment bank's pitch book. It starts with the analyst to the associate to the vice-president and senior vice-president (relationship managers) to the lead of the team, the managing director. As an example, a table of contents or outline will open the pitch book for discussion. Name, title, and department present a management description of the deal team and other contributors within the firm’s internal wealth of resources. An "overview", "financing requirements (such as satisfying capital expenditures "CAPEX" and capital budgeting)", and finally as mentioned a description of the company's universe, the "comparable company analysis" are all essential elements to an investment banking pitch book.
Further reading
- Monkey Business: Swinging Through the Wall Street Jungle (ISBN 0-446-67695-0)