What it means
Public companies publish detailed reports that anyone can read, but private companies do not. PitchBook fills that gap by collecting information on private businesses, the investors who back them and the deals they complete.
Its data comes from filings, news, company contacts and its own researchers. Users include venture capitalists, private equity firms, investment bankers, corporate development teams and founders.
A typical use is to see which investors have funded similar companies, what valuations were paid, or who might buy a business. It is also used to build lists of potential investors and to check how a deal compares with others in the market.
The company was founded in 2007 in Seattle and has been part of Morningstar since 2016. It sells subscriptions to its database and software tools, and it publishes reports on market trends.
Access is by paid licence, so most individuals use it through a company or university. The name can cause confusion because a pitch book is also a general banking term.
In investment banking, a pitch book (often written as two words) is a presentation prepared to persuade a client to hire the bank for a deal. The database company's name echoes this term, but the two things are different.
For finance teams, PitchBook is useful for benchmarking. A founder preparing to raise money can study similar funding rounds, and a corporate development team can build a list of acquisition targets.
A fund can check the track record of a manager before committing money. Like all databases, it has limits.
Private companies disclose less, so some figures are estimates or are missing, and valuation numbers may not reflect the true terms of a deal. Users should treat the data as a strong starting point and confirm important points directly with the parties involved before relying on them.
In practice
Real-world examples.
Example
A founder preparing a seed round uses PitchBook to find 30 investors who backed similar start-ups in the past two years. She reads their typical cheque sizes and picks 10 to approach first. Her outreach is more targeted than a general mailing, and several investors reply within a week.
Example
A corporate development manager at a manufacturer wants to buy a software supplier. He uses PitchBook to list private companies in the segment, with their investors and last funding rounds. The shortlist saves weeks of manual research, and he can see which owners might be ready to sell.
Example
A university endowment's analyst checks the track record of a private equity firm before approving a $10,000,000 commitment. She compares the firm's past deals and exits against its peers and notes where the data is incomplete. Her report is included in the investment committee papers, together with her own judgement.
Case study
Seen in the real world.
Corvale Robotics is a fictional start-up, and this story is illustrative. Its founders planned to raise $8,000,000 and had no idea what valuation was reasonable, because none of their friends had raised money before.
Using a private markets database such as PitchBook, they studied 25 comparable rounds and found that companies at their stage had typically raised between $5,000,000 and $12,000,000. They calculated that selling 20% of the company for $8,000,000 implied a post-money valuation of $8,000,000 / 0.20 = $40,000,000.
Armed with these figures, they pitched confidently and were able to explain why their valuation was in line with the market. When one investor suggested a much lower valuation, they showed the comparable rounds and the investor moved closer to their number. They also compiled a list of investors who had recently funded similar firms, and ranked them by how closely each matched the start-up. They contacted the best matches first and kept notes on every reply. The illustrative lesson is that data on comparable deals helps founders negotiate from knowledge rather than guesswork.
Watch out
Common mistakes.
- Confusing the PitchBook database with a pitch book, which is a banker's presentation to a client who is deciding whether to hire the bank for a deal.
- Treating every valuation in the database as exact, when some are estimates based on partial information and may be revised later.
- Assuming that a company missing from the data does not exist, when private firms may simply not have disclosed anything or may be too new to have been captured by researchers.
Questions
People also ask.
What is PitchBook used for?
It is used to research private companies, investors, funding rounds, mergers and fund performance, and to build lists of potential investors or acquirers.
Who owns PitchBook?
It has been owned by Morningstar since 2016, though it operates as a distinct brand with its own database and research team.
Is PitchBook free?
Most of the data requires a paid subscription, although some summaries and reports may be shared publicly, and universities often provide access to students.
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