Deliverables that Investment Bankers Create

Chris Haroun
A free video tutorial from Chris Haroun
Award Winning MBA Professor, Venture Capitalist and Author.
4.4 instructor rating • 51 courses • 833,438 students

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The Complete Financial Analyst Training & Investing Course

Succeed as a Financial Analyst &Investor by Award Winning MBA Prof who worked @Goldman, in Hedge Funds & Venture Capital

22:31:28 of on-demand video • Updated April 2020

  • 22+ hour complete financial analyst course!
  • #1 Best Selling Investing Course on Udemy!
  • How to pick stocks.
  • Become an expert in Excel for financial analysts (no prior Excel knowledge is required).
  • How to manage a portfolio.
  • How an IPO works.
  • How to build financial models.
  • How to get hired and promoted as a financial analyst.
  • How risk management works.
  • How to use technical analysis.
  • How to value companies.
  • Use and create Excel based templates developed by Chris to help you create financial statements from scratch (meaning income statements, balance sheets, cash flow statements and more).
  • Use and create Excel based templates developed by Chris to help you value companies using several different valuation methodologies, including P/E, P/R and Discounted Cash Flow (DCF).
  • Use and create Excel based templates developed by Chris to help you manage a portfolio.
  • How Monetary Policy works.
  • How Fiscal Policy works.
  • How interest rates are changed and why this is crucial to understand for successful financial analysts.
  • How to pitch long and short ideas to portfolio managers.
  • How to find great venture capital investment ideas.
  • How to come up with mutual fund investment ideas (longs - meaning buys) using an easy to understand top down and bottoms up research process.
  • How to come up with hedge fund investment ideas (longs and shorts) using an easy to understand top down and bottoms up research process.
  • Identify crucial catalysts (timed events) in order to know when the optimal time is to buy or short a stock.
  • Understand how investment banks (the 'Sell Side') can help you be more successful in a hedge fund or mutual fund career.
  • Analyze and understand an income statement (even if you have no experience with income statements).
  • Analyze and understand a balance sheet (even if you have no experience with balance sheets).
  • Analyze and understand a cash flow statement (even if you have no experience with cash flow statements).
  • Understand and use modeling best practices so you can create financial models.
  • Know where to get data in order to build a financial model (in depth understanding of identifying and using/navigating the best free websites and sources to build your financial model)!
  • Create a financial model (projecting the future) for an income statement.
  • Other valuation methodologies, including EV/Sales, EV/EBITDA, P/B, EV/FCF, etc.
  • Create a financial model (projecting the future) for a balance sheet.
  • Create a financial model (projecting the future) for a cash flow statement.
  • Understand valuation best practices so you can create target prices based on your financial models.
  • How to use Discounted Cash Flow (DCF) and how to create the Weighted Average Cost of Capital and Terminal values in order to pick target prices.
  • How to use P/E in order to pick target prices.
  • How to use P/R in order to pick target prices.
  • Come up with a target price based on an average of several different valuation methodologies.
  • Learn about 14 different Financial Analyst jobs and how they overlap and work together (including Investment Banking, Venture Capital, Private Equity, Private Wealth Management etc.).
  • Investment Banking: Understand from a high level perspective what an Investment Bank is as well as what the role/job is of an Investment Banking Financial Analyst, including the pros and cons.
  • Venture Capital: Understand from a high level perspective what a Venture Capital firm is as well as what the role/job is of a Venture Capital Financial Analyst, including the pros and cons.
  • Private Equity: Understand from a high level perspective what a Private Equity firm is as well as what the role/job is of a Private Equity Financial Analyst, including the pros and cons.
  • Private Wealth Management: Understand from a high level perspective what a Private Wealth Management firm is as well as what the role/job is of a Private Wealth Management Financial Analyst, including the pros and cons.
  • Sell Side Research Analyst: Understand from a high level perspective what a Sell Side Research Analyst’s firm is as well as what the role/job is of a Sell Side Research Financial Analyst, including the pros and cons.
  • Sales Trader: Understand from a high level perspective what a Sales Trader’s firm is as well as what the role/job is of a Sales Trader Financial Analyst, including the pros and cons.
  • Buy Side Trader: Understand from a high level perspective what a Buy Side Trader’s firm is as well as what the role/job is of a Buy Side Trader Financial Analyst, including the pros and cons.
  • Mutual Fund: Understand from a high level perspective what a Mutual Fund is as well as what the role/job is of a Mutual Fund Financial Analyst, including the pros and cons.
  • Sell Side Trader: Understand from a high level perspective what a Sell Side Trader’s firm is as well as what the role/job is of a Sell Side Trader Financial Analyst, including the pros and cons.
  • Large Non Finance Company: Understand from a high level perspective what a Large Non Finance Company firm is as well as what the role/job is of a Large Non Finance Company Financial Analyst, including the pros and cons.
  • Equity Capital Markets: Understand from a high level perspective what an Equity Capital Markets’ firm is as well as what the role/job is of a Equity Capital Markets Financial Analyst, including the pros and cons.
  • Hedge Fund: Understand from a high level perspective what a Hedge Fund is as well as what the role/job is of a Hedge Fund Financial Analyst, including the pros and cons.
  • Equity Sales: Understand from a high level perspective what an Equity Sales’ firm is as well as what the role/job is of an Equity Sales Financial Analyst, including the pros and cons.
  • Tech / Artificial Intelligence: Understand from a high level perspective what a Tech / Artificial Intelligence’s firm is as well as what the role/job is of a Tech / Artificial Intelligence Financial Analyst, including the pros and cons.
  • Learn what finance role you are most passionate about pursuing.
English [Auto] Let's talk about deliverables that investment bankers work on there's a couple of different deliverables that they have to create. The first well I'll talk about is called the pitch book. And basically this helps investment bankers to lend what are called bake offs. OK. Basically what that means is a big company wants to hire an investment bank. They don't know which one yet. So they kind of create a request for a proposal which is what you also see in the consulting sector. And then the analysts at the investment banks and their boss of course will put together a massive binder but the binder actually is used as exhibits the first 10 or 15 pages are all that really matter. And this is what a Bake-Off is and they're also used to meet people a lot of times investment bankers will submit their pitch books in a Bake-Off knowing that there's no way they're going to win it. You ask yourself well hold on a second you make me do all that work and we're not going to we're not going to win it. Why did you make me work and become money again. So basically they do it just so they can network. OK so a lot of times they know they can't win it but they can at least establish that initial relationship and relationships are the most important thing in investment banking. If you don't know people that never hire you to do and that's in banking work for and they're used to proposed deals as well so let's say that you were an investment banking team and your boss thinks that Microsoft should consider buying company X. And so you worked on a proposal with your team on K just a couple of PowerPoint presentations Excel models whatever to kind of justify how creative or additive to earnings this deal might be for example to Microsoft. And that's the deal that's being proposed. OK. And that's another type of a pitch book. And so it's more or less a marketing documents. OK it talks about how great your company is and what deals you worked on in the past. Please learn how to use PowerPoint like a boss. I'm sure there's many great UMD courses that can teach you that sort of thing. And these pitch books are never made from scratch so you might feel really overwhelmed with a pitch book that you're working on but don't worry about it because there's a massive repository. You can see that huge filing cabinet that you're hanging off of the top right hand corner of the slide here. So they reuse a lot of slides OK and in the pitch book they always mention the deals they've won in the past so it's just chest pounding to kind of brag in a classy in a classy way what deals they've they've won in the past. And and here's some examples. These are called tombstones right. And these can be put in the newspaper some time just kind of apparent their chest saying we won this deal. That's Canadian Tim Hortons. And they can also be good. You'll see they'll blast versions of these things trophies that investment they will put on their Bandi shelf OK. The pitch book will also say who the bankers are where they've worked before where they've gone to school which I don't think is really relevant. They do it anyway. What does the experience or the cumulative experience of all the bankers added to gather in the pitch book. They'll also talk about the history of the firm and what they're good at. So Goldman you know if they're doing a pitch for the automotive industry they might mention that they've had a relationship with the Ford family for ever since the 1950s. And it's basically a sales pitch. Also to hire your firm that you work at over other firms. What makes you better than other firms. And of course you never say anything negative about another firm in writing or or ever ever in person actually. It's it's not a classy thing to do. And there is a ton of disclosures at the end there's a bunch of lawyers always work with investment bankers and they put a ton of disclosure in so they can't get sued or if they do get sued they are protected. OK here's different types of pitch books we talked about this this was a bank introduction. OK. Another one is what is our view on the markets. How can there is an incredible partner at Kleiner Perkins named Mary Meeker who used to be the top investment banking banker in the Internet sector and she used to put together these amazing market view books and she still does is now actually a venture capital firm Kleiner Perkins do a search on it. She along with Alex Tran and team make this amazing view of the Internet's 100 pages comes out every major so do a search on it. It'll help you understand Internet sector and trends. Pitch book number three is an IPO they want to win an IPO mandates or an M&A mandate as well. OK and so when a company is acquiring another company meaning M&A There's an investment bank that represents the acquirer and a separate always a separate investment bank that represents the inquiry or the firm getting acquired. It's like having legal counsel or consultants to work with you and basically you work long hours on these things and it can be a little bit mind numbing every now and then pitch. Number four is a road show. OK. And it's when when an investment bank takes a company on the road and shows their products to investors OK and there is something called non-goal roadshows which I've shaded here because it's it's kind of out. It's not a real road show. Road shows are done. If you have an IPO OK and you want to kind of show them to everybody of mutual funds buyside people like the hedge funds. But there's also some called Nunzio Roadshow which is kind of like a practice for this where the investment bank might take a company to meet with a lot of a lot of buyside firms like mutual funds or hedge funds and the investment banker will usually sit in the room unless they're asked to leave which happens a lot and they'll sit in the room and they'll kind of listen and take notes and see what the by side thinks of a company from a valuation perspective. Strengths and weaknesses perspective they take a lot of notes and they change their pitch books based on that and they buys management teams as well to hey maybe you should consider this. Shareholders want this that sort of thing. OK. Here are analysts working very hard. Of course your boss works just as hard as you do all the time the hours can be pretty really long for for investment bankers. As you know by now and here are some best practices or best pitch book contents you want to be able to say why you're better than the competition. And again don't ever say negative things about the competition or name them. OK. Don't give them the air time. You also want to list your top strengths. Talk about the management team how awesome the firm is you worked for and the knowledge of a given sector and company that your team has and make it 10 15 pages max less is more. He could also have additional exhibits as well in the appendix which can be quite large. And so I want to stress here that all pitch books are radically different which is why I'm not including examples. OK. All banks have different strengths histories employees etc.. Ok so here's what you do next. OK. I probably can't include pitch books here for compliance reasons but I why you do this. Go to google and search for investment bank put the name of the investment bank their brackets and then pitch. OK. And you'll see a bunch of different examples and you'll see they're all radically different but this will be great for you to understand what is needed to put in these things. And here's an example of one you might want to search for that's out there as well. OK there's a Web site called SlideShare dot net which is unbelievable. It's owned by Linked-In and you can search for pitch books here. So you can search for for example for example Morgan Stanley pich book and a bunch will come up. Number I told you about Mary Meeker. She used to work there and actually you can see down here. There's one of her reports on Internet trends and this is a little bit old but you can see how right Mary was. She basically talks about the importance of mobile as the new desktop. This was back in 2010 so she was really ahead of her time. But anyway go to this Web site SlideShare dot net and do a search on pitch book and books and you'll get plenty of examples. Again every bank and every type of pitch book is completely different. But try to keep them somewhat short.