What Is a Company Profile and How Do You Create One in Investment Banking?
Maybe it’s a bit jaded of me, but I think of company profiles the same way I think of Wikipedia entries – a hodgepodge of basic-as-Ben-Stiller information that’s not particularly interesting, but always necessary to have on hold.
The reason we create company profiles in investment banking is for use when analyzing the competitive landscape of our client company’s industry and for using in presentations to the client about possible deals (who can they buy, who can buy them, who to watch out for).
Company profiles also help us keep tabs on who’s doing what and where each player fits in – very CIAish I know.
What does a company profile literally consist of?
It depends on what it’s being used for.
In say a basic ‘Market Update’ PowerPoint presentation going out to a client, each company profile (of the client’s competitors/suppliers/customers etc) may only be a one slide summary with a 3 sentence description, 5 numbers/multiples, recent news etc – this super succinct form occurs when say 5-15 competitors are being profiled at once in a basic presentation.
In it’s longer form, say if you were detailing every potential acquisition target in a formal pitch book (!), a company profile could include several slides that straddle everything from historical financials to extensive qualitative descriptions of the company’s revenue streams to detailed analysis of specific parts of the company (to suit the immediate usage requirements).
In this form the company profile gets heavy and moves beyond the realm of mere Wikipedia copycat!
Because company profiles are often merely a collection of simple information scattered beautifully across a few slides, they’re considered Intern Level Work and will probably be one of the first things your analyst-mentor will palm off to you come summer. As you can see from the above, you don’t need a 3.8 GPA from Stanford to pull these off.
How should you go about prepping for company profiles?
When you get into the bank flick read through a couple past examples, internalize the language, structure, components, and metrics used, and quite soon you’ll know how to create company profiles without even referencing precedent samples.
The first thing you will notice when reading past examples is how tranquilizer-esque they are; they’ll put you to sleep in an instant.
The data, the language, the facts, the summary – it’s all so common knowledge and BS sounding. But your job is not to win a freaking Excel or creative writing competition so don’t try to break with convention and pen some Charles Dicken prose or engineer some insanely original multiples when you’re asked to give it a go.
Instead play it safe and create company profiles that blend in, not stand out
If you want to impress bankers here then all you need to do is present with extreme succinctness – super industrious language paired with only the really important numbers/graphs etc will wow bankers since it saves them time and hides the “who cares” details.
Some students think they need to find interesting facts and figures about the company that aren’t readily accessible via a company search on some half-rate intelligence database to impress here.
But trust me when I say finding uber original info like this is time consuming and really not expected – and when you’ve had 2 hours sleep in 2 days why would you get all sadomasochistic on yourself with some freaking primary research?
That said, you can’t create all your company profiles by simply grabbing text from a database search, or (and yes this is very common) copy-pasting a Wikipedia entry on the company or text from the company’s own website!!
Instead you need to write from scratch using the tone/type of language and exact structure you see in the banks existing company profiles, and with the type of conciseness you see in these; as well as drawing your figures and numbers directly from the original sources and condensing them into their most essential and insightful form (just like with spreading comps – which we talk about below).
ie you have to summarize the summarizers, but do it accurately and in a client friendly way.
As an investment banking intern you’ll probably more often than not be asked to simply update or double-check existing company profiles.
This can really suck if the intern or first year banking analyst who made the existing profiles did an awful job on them, because bankers will expect a mere ‘update’ to take you no time at all, and yet you’ll almost be making profiles from scratch!!
Although you are all bright eyed and bushy tailed now, don’t be disheartened if you make dozens of company profiles and they never get read – such is the nature of them. ie banks will want profiles on hand for ‘just in case’ a client requests them, or a deal takes heat.
If you have an investment banking internship coming up or are starting your analyst program soon you should check out the most common tasks junior bankers perform. In this article we list the top 39 and explain the what/why/how so you can get a flying head start.