What is a company profile and how is one created in investment banking?

What is a company profile and how is one created 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 Ben-Stiller-like jumble of basic information that isn’t particularly interesting, but is always worth holding on to.

The reason we create company profiles in investment banking is for use when analyzing the competitive landscape of our client’s company’s industry and for use in presentations to the client regarding potential deals (who can buy, who can buy them, for whom to be careful).

Company profiles also help us keep track of who’s doing what and where each player fits in – very CIA, I know.

What does a company profile literally consist of?

It depends on what it is used for.

Say a basic “Market Update” PowerPoint presentation going out to a client, each company profile (the client’s competitors/suppliers/customers, etc.) could just be a one-slide summary with a 3-sentence, 5-number description /recaps, recent news, etc. – this super short form occurs when say 5-15 contestants are profiled at once in a main presentation.

In its longer form, say if you’re describing each potential acquisition target in a formal pitch book (!), the company profile might include several slides that cover everything from historical financials to extensive qualitative descriptions of revenue streams of the company to detailed analysis of specific parts of the company (to meet immediate usage requirements).

In this form, the company profile becomes heavy and goes beyond the realm of simple Wikipedia copy!

Because company profiles are often just a collection of simple information nicely spread out over a few slides, they are considered intern-level work and will likely be one of the first things your analyst mentor hands you over the summer. As you can see from the above, you don’t need a 3.8 GPA from Stanford to complete them.

How should you prepare company profiles?

When you get into the bank, read a few past examples, learn the language, structure, components and metrics used, and very soon you’ll know how to create company profiles without even referring to case studies.

The first thing you’ll notice when reading past examples is how tranquil they are; they’ll put you to sleep in no time.

The data, the language, the facts, the summary – it’s all so common knowledge and BS sounding. But your job isn’t to win a damn Excel or creative writing competition, so don’t try to break convention and write Charles Dickens prose or create some wildly original multiples when you’re asked to try.

Instead, play it safe and create company profiles that blend in, not stand out

If you want to impress the bankers here, then all you have to do is present with extreme brevity – super laborious language coupled with only the really important numbers/graphs etc. will wow the bankers as it saves them time and hides the “who cares” details.

Some students feel that they need to find interesting facts and figures about the company that are not readily available through a company search in some semi-intelligence database in order to impress here.

But trust me when I say that finding super original information like this takes a long time and really isn’t expected – and when you’ve slept 2 hours in 2 days, why would you go all sadomasochistic on yourself with some damn primary research?

However, you cannot create all your company profiles by simply taking text from a database search or (and yes, this is very common) copying and pasting a Wikipedia entry for the company or text from the company’s own website!!

Instead, you should write from scratch using the tone/type of language and the exact structure you see in existing bank company profiles, and with the type of brevity you see in them; as well as extracting your figures and numbers directly from the original sources and condensing them into their most essential and insightful form (just like dispersing computers – discussed below).

i.e. you need to summarize the summarizers, but do it accurately and in a customer-friendly way.

As an investment banking intern, you will probably more often be asked to simply update or re-verify existing company profiles.

This can be really nasty if the intern or first year bank analyst who did the existing profiles did a terrible job with them because bankers will expect a simple “update” to take no time at all and you’ll pretty much be doing profiles from zero!!

Even though you’re all bright-eyed and bushy-tailed now, don’t be discouraged if you make dozens of business profiles and they never get read – that’s their nature. i.e. banks will want profiles on hand “just in case” the customer asks for them or the deal heats up.

If you have an investment banking internship coming up or are starting your analyst program soon, you should check out the most general tasks junior bankers perform. In this article, we list the top 39 and explain the what/why/how so you can get a flying lead.

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