pitching vs execution - explain?
What is meant by execution- mainly just working on the models and getting the deal done? While pitching is just trying to get a new M&A deal only to pass off the work to the people who do the execution? After all the models and work is completed is there some type of final pitch which incorporates all the models to go over the deal?
Any information is appreciated.
How Do Investment Banking Deals Work?
Pitching and execution are common terms in investment banking deals. WSO user @TheMarshall" elaborates on the deal process for us:
The Pitch
- A deal starts with a pitch
- MD tells VP tells Associate tells Analyst what should be in a pitchbook
- For a sellside pitch to a company, an analyst will build a pitchbook that generally includes firm and deal team credentials, a 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), a valuation section (comps, precedents, DCF and LBO valuation - "modeling") and an 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
Win the Pitch -> Execution
- If your team gets the mandate to sell the Company (ie "wins the pitch"), you are now in "execution" mode
- The work that went in to your pitch is a starting point, but all of the analyses, both qualitative and quantitative, are very thoroughly refined with the help of the Company (yes, this may include more "modeling")
- This is why execution involves a high degree of client interaction for junior people, which is what makes the experience valuable (not necessarily the "modeling"!)
- Anyway, the deal team puts together an Offering Memo (basically a book about the company) and sends it out to a list of potential buyers
- The buyers respond with an indication of interest (the analyst tracks and documents these responses in a variety of ways).
Due Diligence
- Then a few buyers are selected for diligence (analyst sets up massive virtual data room and manages access to and documents in it) and to meet with the management of the company for management presentations (the presentations themselves are prepared by the analysts)
Bids -> Deal Closes
- Final bids are submitted (again, tracked by analysts)
- A buyer is selected
- Then it's time for confirmatory diligence
- Analysts spend a lot of time acting as a liason between the company and the buyer, sending documents back and forth and coordinating conference calls
- With any luck, the lawyers sign off, the deal closes, and the analyst orders a lucite (or "deal toy") and puts together a closing file
Execution is not just modeling -modeling, management presentations, due diligence process/data room, confidential information memo, bidding, and etc. the entire M&A process
pitching is pitching -creating pitchbook presentations and etc.
you forgot the following:
reserving conference rooms ordering food booking flights making sure clients/investors have security clearance turning on the computer and powerpoint for your mds
acting like a wal-mart greeter when your clients/investors enter and leave the room
The world has changed. And we must change with it.
really. the EAs do most of that list at my office (boutique). the only thing that analyst do on that list is kiss the client's feet when they walk through the door
people here focus too much on the modeling part...it is important...but modeling is not everything...and modeling is just a small portion of executing deals, very small.
M&A Execution is also all about IMs, timetables, letters, investor statements, working groups lists etc. which are much more dull than pitch books. I'd say you learn a lot more building a book than any of the above.
Agree about it being a small part of the execution process. But at the analyst level, that about the most you're gonna do.
FYI... why do people always say pitching as if they're sitting with the client in his den with a brandy snifter and a cigar discussing the merits of hiring your firm to advise on the deal? Analysts are spinning PowerPoint books... nothing else. If they're lucky they carry the books to the pitch. Compared to putting a pitch together, modeling is faaar better. Most of our Admins are really good in PPT and spin out pitch books.
After all the models and work is completed is there some type of final pitch which incorporates all the models to go over the deal?
in other words are there deal specific pitchbooks which are created , not just more generic ones to try and win over clients.
are some pitches deal specific which incorporate models as sort of a final pitch to the client about the deal. are these considered management presentations or something
I hope your resume bullets don't sound like this
Erh what are you trying to say?
Pitches are marketing efforts
Deals are deals. Normally a deal sorts of just wraps up when you sign the SPA and money changes hands (now I never really got who actually arranges for money to change hands - probably lawyers). Everyone is happy and goes for celebratory drinks - and then a closing dinner sometime down the track... and of course you invoice the client. Of course sometimes there are post deal admin paperwork to complete and if you are acting for the bidder, you will normally stay very close to management post transction if you are still on friendly terms.
As to whether you have a final pitch to wrap up at the end. No. It will seem quite absurd to pitch a transaction that has already happened?
And yes, pitches involve models as well.
so pitches involve just basic models of a potential deal?
i just dont see if you are trying to win over a M&A sell-side client what you are pitching to them. have you already researched buyers and put together models before the pitch? Or is all this technical work done after the pitch?
i guess my real question is what goes into the pitchbook, i thought it was an inital step with no real models specific to the deal.
.
OMG. Stop with the models please. Models don't take up the entire pitch...there may be tombstones in the space you are trying to pitch, bios of MDs on your team, case studies of similar deals, your bank capabilities and how your bank is better than other banks, and how many deals you guys have done and the league table for the space, models, where the multiples are trading at right now, precedent transactions in the space etc. etc. etc. etc. etc.
what's with your obsession over financial models?!?!?!
This thread is what you get when a bunch of arrogant undergrads try to tell each other how much they know about banking - which is almost nothing. I'll try to help with an example of how a typical process might (but does not always) go:
A deal starts with a pitch. MD tells VP tells Associate tells Analyst what should be in a pitchbook. So, for a sellside pitch to a company, an analyst will build a pitchbook that generally includes firm and deal team credentials, a 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), a valuation section (comps, precedents, DCF and LBO valuation - "modeling") and an 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.
If your team gets the mandate to sell the Company (ie "wins the pitch"), you are now in "execution" mode. The work that went in to your pitch is a starting point, but all of the analyses, both qualitative and quantitative, are very thoroughly refined with the help of the Company (yes, this may include more "modeling"). This is why execution involves a high degree of client interation for junior people, which is what makes the experience valuable (not necessarily the "modeling"!). At the same time, there are a lot of logistical items for which the analyst is responsible. Anyway, the deal team puts together an Offering Memo (basically a book about the company) and sends it out to a list of potential buyers. The buyers respond with an indication of interest (the analyst tracks and documents these responses in a variety of ways).
Then a few buyers are selected for diligence (analyst sets up massive virtual data room and manages access to and documents in it) and to meet with the management of the company for management presentations (the presentations themselves are prepared by the analysts). Final bids are submitted (again, tracked by analysts), a buyer is selected, and then it's time for confirmatory diligence. Analysts spend a lot of time acting as a liason between the company and the buyer, sending documents back and forth and coordinating conference calls. With any luck, the lawyers sign off, the deal closes, and the analyst orders a lucite (or "deal toy") and puts together a closing file.
Now you guys can go on bitching at each other with a little better information...
TheMarshall, thank you. Though I'm sure London will try and correct you somewhere - as an undergrad junior, he does have a wealth of knowledge that others can only hope to one day acquire.
thanks themarshall. let this arrogant undergrad buy you a drink up in nyc this summer.
London is just a huge fucking tool. Everyone already knows you're in college, why are you trying to front like you have so much fuckin experience pitching, executing, and closing deals?
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