Pitch

Pitch is a term that refers to the attempt by a firm to convince another firm to buy or sell something. A contextual example is "Goldman Sachs pitched several mid-cap tech companies to a private equity company".

Pitches are often speculative with the target buyer having no or little prior knowledge of the companies being presented and as a result, many proposals end in nothing at all. Analysts and Associates at investment banks will often spend the majority of their time creating models and compiling information for proposals.

Investment Banking Pitch Process

Here's the breakdown of the pitch process in an investment bank:

• A deal starts with a pitch
• MD tells VP who tells Associate who tells Analyst what should be in the pitchbook
• For a sell side presentation of a company, an analyst will build a pitchbook that generally includes:
  • Firm and deal team credentials
  • Positioning section (a largely qualitative analysis of the company to be sold and why you believe your team can sell it for a high value)
  • Valuation section:
    • Comps
    • Precedents
    • DCF and LBO
  • Analysis of potential buyers and why they might be a good fit for the company to be sold
• The Analyst, with the guidance of the Associate, basically does all the work for the pitchbook, including the modeling, positioning of the company and profiling of the buyers
• After several "turns" (senior people recommending changes), the books get printed and the meeting happens
  • Whether or not an analyst is invited to a meeting varies by group culture

Read more of the pitch breakdown in this discussion.

Skills Required to Work on a Pitch

While the skills required to work on a pitch do overlap with the skills necessary to work in investment banking, here are a few notable skills that help during the proposal process:

• People skills

As you will have to present to potential buyers you will need to have the social skills to interact with them and convince them to accept your offer. This can include reading their feelings towards the direction the presentation is going and the ability to make genuine connections with them in a short amount of time.

• Attention to detail

You will also have to look over many small details of a company or product you're proposing, making it almost necessary to have strong attention to detail. This is especially true as an Analyst when you're often pouring over the nuances of a product to sell and making sure that each detail is accounted for in your presentation.

Tips for a Successful Pitch

Combining the skills listed above and the extensive due diligence performed on your potential buyer, here are some extra tips for a successful pitch:

1. Have a clear message

Show your potential buyers what an amazing opportunity they could have buying the company or product you're selling.

2. Present your case early in the presentation

Lead your presentation with a short summary and overview of the purpose behind your pitch.

3. Implement financial analysis

As mentioned earlier, while it's important to demonstrate what an amazing opportunity you have to the buyer, use strong financial analysis as a tool to help achieve this. However, be mindful to not get lost in presenting an endless sea of numbers.

4. Show how your presentation connects to the macro view

Keep in mind that your potential buyer has probably heard a similar proposal from another investment bank. Instead, try to add some more by connecting your opportunity with the macro goals of your potential buyer. If done successfully, they will not only see what a great opportunity is in front of them, but see how it aligns with the macro goals of their firm.

Free Resources

To continue learning and advancing your career, check out these additional helpful WSO resources:

• Retained Earnings
• Fraud Triangle
• Accounts Receivable Turnover Ratio
• Marginal Cost Formula
• Nash Equilibrium