But what goes into a pitchbook exactly?

We know, and you probably know too, that the pitchbook creation process is broken and it’s time to fix it. This was the reason Pellucid was formed, to provide investment bankers and strategic advisors a faster, better, and cheaper way to create content.

In order to fix something, though, you need to really understand it.

As an investment banker, there is a fair chance you spend a significant portion of your life pulling together pitchbooks, but have you ever taken a step back to consider what goes into them?

If you ask ten different bankers from ten different banks, you will probably get ten different answers. I’ve presented somewhere over 10,000 pitchbooks and undoubtedly created hundreds of thousands of pitchbook pages, but even with this experience, it wasn’t initially clear to me what a pitchbook consisted of.

Why is something so central to what we do so difficult to know?

I think one of the reasons is because we can only answer this question using our own experience as a base, and this varies from individual to individual.

A Wall Street veteran may say, “All pitchbooks are the same”, comparatively, a junior banker may perceive everything they do to be bespoke. Both perspectives are true; it’s just the quantum of experience driving the perspective.

To better answer what exactly is in a pitchbook, we undertook one of the most painful things you can do in finance: an audit of over 2,000 pitchbooks to see what we could find. And yes, this did include auditing older versions for the same deck. It was a long process.

Here’s a snapshot of what we learned:

Length

The average pitchbook is 42 pages long, with the majority running somewhere between 25-100 pages. That’s a lot of pages.

Churn

For every page in the final version of a pitchbook, two pages ended up on the cutting block. So that 42-page pitchbook on average started its life as 126 pages long. This doesn’t even include the multiple rounds of data updates, which blows the numbers out further still.

Composition

We broke everything into four categories: text, standard charts and tables, semi-structured content, custom content. We found that approximately 40% of pitchbook material is text, 30% is standard content, and the remaining 30% is split evenly between semi-structured and custom content. 

A note on standard charts and tables, perception is not reality. There may be a particular MD you work with who is exacting in her calculations and demands certain visualization treatments, requiring hours of additional work. You may perceive this as a one-off demanding MD. In reality, every MD is demanding and what may be considered as torturous, is actually pretty standard.

Human capital

Not strictly from the pitchbook audit, but a result of over 3,000 banker interviews. On average, junior bankers said they spent the majority of their time on pitchbooks and around 35% of that time on standard charts and tables. Interestingly, for full-time employees of KPOs and captives (KPOs owned and operated by a bank), that number reached over 90%.

Total cost

$40,000 for an average pitchbook. That’s not even one of those “beauty parade” pitchbooks. This number is derived from a time and motion study that one of the bulge bracket banks shared with us. The interesting thing is that when we interviewed people, the senior bankers estimated the human capital cost of a pitchbook as much larger! Even if $40,000 is a conservative estimate, it’s still a big investment. Additionally, as a rule of thumb we found that each year, most banks produce pitchbooks equal to ten times the number of investment bankers. So say you have 1,500 bankers, that’s 15,000 pitchbooks at $40,000 each totaling $600 million in pitchbook costs alone.

These are big numbers. And on the whole, there isn’t a lot of clarity about how much pitchbook creation is costing banks. We used these findings to whip up a calculatorwhere you can adjust salaries, costs, and other inputs, to see how much you are spending on pitchbook pages.

And while you may be of the opinion that pitchbooks are secondary to a banker’s main role—which is to execute deals—and maybe they should be cut, the thing is, to get the opportunity to execute for clients, you need to win the pitch and to do that, you need a pitchbook.

How do you define a pitchbook? Email me at adrian.s.crockett@gmail.com.