If you read our post on what investment bankers actually do, then you‘ve probably understood most of their work (especially at the junior levels) translates into building slides for a pitch deck on PowerPoint.

(If you haven’t read our other post, stop reading this one. Odds are this won’t make sense. Go read it now and come back.)

But what the hell goes into that pitch deck? What’s its’ purpose?

Why do investment bankers make pitch decks?

From my experience at BofA Merrill Lynch, I learned that investment banking has 2 main “modes” or “phases”:

  • When you’re pitching (i.e. trying to get a client to hire you)
  • When you’re executing (i.e. you’ve been hired, now you gotta do the work)

Pitching

When you’re pitching, the purpose of a pitch deck is to convince a client to hire you. More specifically, these are materials that clients can a) review on their own to understand why you’re worth hiring and b) have as accompanying materials with you in an in-person meeting where you will convince them to hire you.

Execution

When you’re working on a live deal (execution), there are tons of things to do ranging from working with your client to build a financial model to value their company to working with their lawyers and regulators to get a multibillion dollar M&A deal approved. Slide decks during execution are usually just materials prepared for meetings that are meant to help accomplish milestones to get the deal done. To make it even clearer, let’s use a couple of examples:

  • When you build the financial model for a Company, it is a huge Excel file with dozens of tabs. You’re not going to present that to the Board of a Company or to a potential buyer of that company. You’re going to synthesize the main points, charts, and takeaways, and put them in a pitch deck so you can go over them in a meeting.
  • When you meet with regulators or lawyers, you’ll also need materials to go through meetings. You’d be surprised how many of these require complex calculations that clients ask investment bankers to put together. Same logic — you need to output these analyses in a way that the person on the receiving end will understand (slides!).
  • When your client has an internal committee that needs to approve the transaction you’re helping them with, they will need accurate materials prepared in a timely manner and will ask you for these. Failure to pass these kinds of committees can sometimes destroy a deal altogether.

Who prepares all those materials? You guessed it — investment bankers. More specifically, analysts & associates are in charge of most of the grunt work to make sure these decks look great, professional and reliable.

They get paid to make sure all of these are prepared correctly, in a timely fashion, and always portraying the facts in the best interest of the client who’s hired them.

Lastly, design & presentation matters surprisingly more than you’d think, which is one of the many reasons these presentations can sometimes take longer than expected to prepare.

One of my senior bankers once actually told me “If the slides look pretty & professional, everyone is less likely to doubt the numbers.”

What goes into investment banking pitch decks?

To follow the same train of thought, there are slide decks you prepare when you’re pitching, and then those you prepare during execution. They are evidently very different.

Decks used for pitching

I dare to say that most of these decks are very similar, regardless of what bank, group or type of deal you’re pitching. Here are some things that you’ll see in a typical deck used for pitching:

  • Credentials (bankers call them “creds”)  —  slide(s) with logos and badges of all the deals your bank has done that are relevant to this deal. (e.g.: if you’re pitching to get hired as the M&A advisor for an energy company, then you’ll include previous public deals you’ve done in the energy space or large M&A deals that are relevant). These slides are supposed to give you credibility and make you seem like the more experienced choice for this deal.
  • Market analysis or basic economic analysis — these slides are meant to prove that you understand the industry of the client and you will be able to understand what external and economic indicators may or may not influence the execution of the deal (especially important if you’re trying to pitch an IPO or a bond offering, where you will have to “price” the equity or debt of the company.)
  • Execution — these slides are meant to prove how your specific bank will execute this deal, if hired. Now, here’s where it really depends on your bank and senior banker, but most of these include: a) process for the deal including important dates and milestones to get the deal done, b) story/narrative that will be told to the markets or the counter party if you’re selling your company. This is meant to show the bankers “get it” and will be able to highlight what’s most convenient to the client about the transaction to get them their desired outcome.
  • Financial Analysis — this is the fun part for the junior bankers. These slides are a preliminary valuation of the company and where you think it will be priced (again, very different depending on whether this is an M&A, equity, or debt deal), if hired. Here you’re showcasing that you understand how these deals are valued in the industry, and what methodologies you will use to justify a higher/lower price (whatever you’re looking for depending on whether you’re buying or selling or pricing an IPO).
  • Others — You might be up front and include information about what you’ll charge the client (deal fees), other deals/products your bank has done with the client to show you have a relationship, and more.

Decks Used for Execution

This is impossible to generalize for, but these decks can sometimes be very short or very long depending on what milestone in the deal you’re trying to accomplish.

For example, the deck where you value the entire company with multiple methods (discounted cash flows, precedent transactions, and comparables) might be a bit longer or more complex to explain multiple scenarios and the assumptions used to build this model.

On the other hand, a slide deck to explain the process of the transaction to the client given updates in the market (when I was working on an IPO that kept getting delayed due to market conditions, every few months we did one of these), can be one slide with an updated timeline with key dates.

The important thing to note is that no matter if you’re building a deck for a pitch or an actual live deal, all of these items end up turning into beautifully crafted PowerPoint slides, and each slide has a role to play in the overall message you’re communicating to the client.

Where do most pitch decks get made?

Microsoft PowerPoint. You will use Excel to build charts / numerical outputs and maybe some other tools like FactSet to get market data or info, but most if not all of it ends up on PowerPoint slides.

Hope this helps. If you are curious about other parts of investment banking slide decks, comment below and I’ll update the post to reflect any important ones I missed.

As usual, remember that every bank & group is different in their way of executing these deals and the industry is constantly evolving. Speaking with people inside specific banks & groups is the only real way to get updated information.

Deepak CEO @ The Lobby