Pitch Book

A pitch book is a marketing device used by an investment bank. 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 either 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" 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).

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 micro economic and company specific analysis which will not only support the investment bank's vision, but it will 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.
* Barron's Financial Guides, John Downes and Jordan Elliot Goodman, 1995