“In investment banking, bake-offs decide who gets the deal, and who goes home with a deck no one reads.”
That one line sums it up.
A bake-off is the make-or-break competition in which banks fight to win a client’s mandate.
So why do bake-offs matter so much?
In this article we will spell out what a bake-off is, walk through the step-by-step process, and show why the slickest deck does not always win.
You will see real cases like Uber, WeWork, and Coinbase to learn what actually matters.
Key Highlights
- A bake-off is a head-to-head pitch where banks compete to win a client’s deal.
- The winning bank often stands out through relationships, trust, and a strong pitch, not just the best numbers.
- Cases like Uber, WeWork, and Coinbase show how real deals are won through strategy and persuasion.
What Is a Bake-Off in Investment Banking?
Simply put, a “bake-off”, also called a beauty contest is a competitive pitch process where multiple investment banks vie for the same deal or client mandate.
Despite the baked-goods name, it has nothing to do with cupcakes, it’s more like an audition to be the client’s financial advisor.
Several banks are invited to present why they should be chosen to lead a transaction.
This happens in all kinds of situations: selling a company (M&A), raising capital through an IPO or financing, restructuring a distressed firm, even pitching to provide a fairness opinion on a merger.
If there’s a big transaction on the line, chances are the company will hold a bake-off to pick their banker.
During a bake-off, each bank showcases its best ideas, team, and track record to impress the prospective client.
Think of it as Shark Tank, but the sharks are bankers, and the prize is millions in fees.
Every bank will tout how they would value the company, which buyers or investors they’ll bring to the table, and why their team has the secret sauce to execute flawlessly.
It’s an intense show-and-tell, with real money and reputations at stake.
How Investment Banking Bake-Offs Work (Step-by-Step)
So how does a bake-off actually go down?
Here’s a step-by-step look, from the initial invite to the final handshake:
Step 1: Client Invites Selected Banks
A company, often its CEO or board, decides it needs an advisor, say, to sell the business or underwrite an IPO, and invites a handful of banks to pitch.
Often 2–5 banks make the cut.
How do they choose who to invite?
Usually based on existing relationships and reputation.
But even if management has a front-runner, good governance usually demands getting multiple proposals.
The invited banks sign NDAs and receive some information on the company.
In some cases, the company even hosts the bankers for a management meeting or site visit to give everyone a fair shot at understanding the business.
Step 2: Banks Prepare Their Pitch Books
Once invited, each bank’s team scrambles to build a killer pitch book.
Junior bankers practically live at the office, researching the company and industry, modeling financial scenarios, and crafting a thick PowerPoint deck with the bank’s proposed game plan.
These pitch decks often go through dozens, if not hundreds, of revision, every number checked, every comma polished.
The goal is to cover everything the client cares about: valuation, potential buyers/investors, market conditions, the deal team’s credentials, and a step-by-step plan to execute the transaction.
By the end, each bank has a tailored strategy packaged in a glossy booklet with the company’s logo on it.
Step 3: The Pitch Presentation (30–60 Minutes)
On pitch day, each bank gets a 30–60 minute slot to present to the client (in the boardroom or via video call).
The team, typically one or two MDs and a couple of senior bankers, shows up with printed pitch books and slides.
The MD opens with introductions and big-picture context, then they dive into the core of the pitch:
Here’s what we think you’re worth. Here are the most likely buyers or investors. Here’s our plan and timeline.
Each team highlights its past deals in the sector to build credibility.
The best presentations feel conversational, bankers read the room and emphasize what the client cares about most.
Make no mistake, it’s a bit of theater: each bank is trying to outshine the others with confidence.
Step 4 :Q&A and Follow-Ups
After the presentation, the client will fire off questions.
This is where senior bankers earn their keep. Expect tough questions about valuation assumptions, the buyer list, and how the deal would be executed.
The bankers have to think on their feet. Often, the client will also bring up fees at this stage or in a follow-up call, since fees can be a deciding factor in a close contes.
It’s rare for a decision to be made in the room.
Typically, the executives go back to deliberate and may ask two or three banks for additional info or a better fee proposal.
In other words, the bake-off can continue with follow-ups even after the initial meeting.
It’s not over until the client’s decision-makers have all their questions answered and have compared the contenders internally.
Step 5: Client Picks the Winner
Finally, the client chooses their advisor.
One bank gets the good news (“Congratulations, we’d like to move forward with you…”), and the others get the polite thank-you-but-no-thank-you call.
The winner signs an engagement letter and then the real deal work begins, while the losers pack up their unused pitch books.
The decision often comes down to a mix of factors: prior relationships, the quality of ideas, the chemistry and trust established, and yes, sometimes the fee.
It’s rarely as simple as “highest price wins” or “best model wins.”
Insiders acknowledge that bake-off decisions are not purely logical – emotion and gut feeling play a big role.
In practice, executives pick the bank that made them feel the most confident.
What Really Drives the Outcome?
Even a flawless pitch book isn’t enough, the human factors often matter more. Here are some key factors that can tip the scales:
- Relationship History
Banks with a long, trusted relationship with the client have a huge edge.
If an MD has been schmoozing the CEO for years, or sits on a charity board with the chairman, that goodwill can outweigh a slightly superior pitch from an unknown team. Trust built over time is a secret weapon.
- Relevant Expertise
Clients want advisors who have “seen this movie before.” A bank that knows the client’s industry or deal type inside-out will hammer that point.
Showing a stack of relevant tombstones (similar deals closed) and deep sector insight gives the client confidence you won’t be learning on the job.
- Creative Strategy
A clever idea can win the day. If one bank proposes a novel approach or spots an angle others missed, it can wow the client.
You’re not just selling execution – you’re selling a vision. A bit of creativity makes a pitch memorable.
- Senior Banker Charisma
Don’t underestimate the personal factor.
A charismatic, confident senior banker who clicks with the client can leave a lasting impression.
Clients often hire the team they like the most.
An MD who instills confidence (“we’ve got your back, and we’ve handled situations like this before”) will beat a stiff presenter, even if the slides are similar.
- Fees and Flexibility
In tight contests, a bank willing to trim its fee or use a performance-based structure can gain an edge.
Large companies won’t pick solely on price, but if all else is equal, a friendlier fee proposal can make a difference.
- MD Politics and Inside Influence
Sometimes the bake-off’s outcome is quietly pre-determined. Maybe a board member has a soft spot for a particular bank, or the CFO is an alum of Bank X and has his old buddies lobbying.
In such cases the bake-off might be mostly for show, RFPs go out and pitches happen, but one bank was the favorite from the start.
Yes, your model needs to be tight. But no, that alone won’t win you the bake-off.
Real-World Bake-Off Examples (How Top Banks Won Mandates)
Example 1: Uber IPO (2019) – Beauty Contest for Lead Underwriter
Type of Deal:
Initial public offering of a major rideshare tech company (Uber).
Banks Involved
Morgan Stanley vs. Goldman Sachs (among others).
What Each Bank Pitched
Morgan Stanley leveraged its long courtship and deep understanding of Uber’s business. Notably, Morgan’s top tech banker Michael Grimes even moonlighted as an Uber driver for years to gain insight and impress Uber’s team.
This unconventional effort underscored Morgan Stanley’s commitment and “fluent” grasp of Uber’s culture.
Goldman Sachs, for its part, highlighted its early financial support; the bank had made a $5 million private investment in Uber back in 2011, a stake worth an estimated $600 million by IPO time.
Goldman emphasized that it recognized Uber’s potential early and could leverage its vast placement network to achieve a lofty valuation.
Who won?
Uber ultimately selected Morgan Stanley as lead IPO underwriter over Goldman.
The deciding factors were Morgan Stanley’s unparalleled relationship and its track record with big tech IPOs.
Grimes’s dedicated wooing, convinced Uber’s board that Morgan Stanley “knew the company best” and could tell its story to Wall Street most credibly
Goldman still earned a co-manager role, but Morgan Stanley’s client-centric pitch and senior banker rapport gave it the edge.
Example 2: WeWork IPO (Aborted, 2019) – Bake-Off for M&A/IPO Advisory
Type of Deal
Proposed IPO for WeWork, a high-flying office-sharing startup that later pulled its offering. WeWork’s executives held a beauty contest to pick lead advisors.
Banks Involved
JPMorgan vs. Morgan Stanley vs. Goldman Sachs.
What Each Bank Pitched
JPMorgan (WeWork’s principal lender) used its financing muscle, it offered to arrange a massive $6 billion credit facility to backstop WeWork post-IPO.
JPMorgan also touted its close ties, CEO Adam Neumann considered JPM his personal banker.
Goldman Sachs, a minor equity holder in WeWork, wowed management with an extremely optimistic valuation forecast, Goldman’s bankers suggested WeWork could go public at ~$61–96 billion (far above its last private $47B valuation).
This bullish pitch, along with Goldman’s earlier capital commitments, demonstrated confidence in WeWork’s story.
Morgan Stanley, by contrast, was more cautious. Known for tech IPOs (it had just led Uber’s IPO), Morgan Stanley pitched its expertise but refused to commit to the large debt financing WeWork wanted, citing concerns over the company’s risk profile.
Who won?
WeWork awarded the lead mandate to JPMorgan (with Goldman as co-lead) because JPMorgan went “all in”. It was willing to bankroll WeWork’s needs and had a long-standing relationship with the founder.
Goldman’s aggressive valuation pitch also helped secure it a top spot. In contrast, Morgan Stanley’s reluctance to provide financing hurt its bid.
After losing the lead-underwriter slot, Morgan Stanley walked away rather than serve in a minor role.
In sum, WeWork chose the banks that offered the most support (financially and personally) over the one taking a more prudent stance.
Example 3: Coinbase Direct Listing (2021) – Bake-Off for Lead Advisor (Fintech IPO)
Type of Deal
Direct listing of Coinbase, a leading cryptocurrency exchange .
Banks Involved
Goldman Sachs vs. other top banks (JPMorgan, Citigroup, etc.) vying to lead Coinbase’s stock-market debut.
What Each Bank Pitched
Goldman Sachs leaned heavily on its crypto credentials. By 2018, Goldman had notably established a dedicated digital currency trading desk, signaling it was more “crypto-friendly” than many rivals.
In pitching Coinbase, Goldman emphasized its understanding of the crypto market and willingness to champion a crypto business.
Other banks (like JPMorgan) were more cautious on crypto at the time and lacked Goldman’s visible commitment to the asset class, giving Goldman a unique angle.
Who won?
Coinbase selected Goldman as its lead advisor for the direct listing. The deciding factor was trust in Goldman’s expertise with cryptocurrencies and its enthusiasm for the sector.
Goldman’s early move to embrace crypto made Coinbase confident that Goldman “really gets” their business and could best communicate it to public investors.
This crypto-savvy reputation set Goldman apart in the bake-off, securing it the mandate to head Coinbase’s landmark listing.
Why Bake-Offs Matter (and What You Should Learn From Them)
Bake-offs have real consequences: the winner gets the big deal (and the fees), while losers go home empty-handed.
For clients, choosing the right advisor can mean a better outcome and a smoother process. In other words, these contests determine who leads when the stakes are highest.
If you’re a finance student or junior banker, understanding bake-offs means understanding how deals truly begin in investment banking, behind the scenes, through competitive pitches long before any deal makes headlines.
There’s also a career lesson.
As a junior banker, spending weeks on a pitch that loses can feel like all that work was wasted.
But no pitch is ever wasted, each one is practice, and much of the work can be reused for the next opportunity.
And when your team does win, it’s not just because an MD dazzled the client, it’s largely thanks to all the groundwork the junior team put in.