How long should investment memos be?
An investment memo is about ten pages long, excluding appendices. It's a medium-length presentation of a company that includes the primary information about the business. The deal memo should include all information required to convince partners about an investment decision.
An investment memo is a clear and concise articulation of the key components of your company and what the rationale is for investing in it. Writing one helps clarify your company's story and pitch.
- Make it easy to understand. Clarity is key. ...
- Optimise the layout. Include a concise company and market overview. ...
- Be transparent - outline the risks. No one likes surprises. ...
- Include the terms of the investment. ...
- Get the financials right.
- Executive Summary -> investment thesis, why the company, industry average growth rate, brief growth strategy and exit strategy.
- Source of deal - Background of seller and reason for sale (retirement/spin off etc)
- History of the business.
After a venture capitalist hears a startup pitch and does some due diligence, he or she will draft an investment memo. The document may be five to ten pages long and provide analysis on the pros and cons of the opportunity, along with a recommendation for the partners as to whether to pursue the deal or not.
- Company Overview / Track Record. Who the hell are we, and why do we deserve your trust and hard-earned dollars? ...
- Investment Overview. ...
- Reasons to Acquire. ...
- Location Overview. ...
- Property Overview / Specs. ...
- Tenant Overview. ...
- Sources and Uses of Funds. ...
- Financial Summary.
- Company Description and History. First provide a description of the subject company, along with its history, management team background and operations. ...
- Market Analysis. ...
- SWOT Analysis. ...
- Financial Analysis.
IC memos are the official document capturing the investment suggestion by the investment team of the fund to the committee and usually reviewed by limited partners who are considering investing in funds.
Memo Example 1: A General Office Memo
Coworkers, It has come to my attention that many in the office have been spending time on the Google home page microgames. This memo is a reminder to use your work hours for work.
- Determine or define the problem is. Your memo should start with a problem statement. ...
- Find out possible causes of the problem. ...
- Write out who and what is affected by the problem. ...
- Make a list of the possible solutions to the problem. ...
- Recommend the best possible solution.
What goes in an investment committee memo?
- Investment Overview – executive summary of the opportunity.
- Property Description – existing and future physical property characteristics.
- Business Plan – how you will make money.
- Rationale – why this particular investment, and why now.
- Company Overview / Track Record. Who the hell are we, and why do we deserve your trust and hard-earned dollars? ...
- Investment Overview. ...
- Reasons to Acquire. ...
- Location Overview. ...
- Property Overview / Specs. ...
- Tenant Overview. ...
- Sources and Uses of Funds. ...
- Financial Summary.
- Company Description and History. First provide a description of the subject company, along with its history, management team background and operations. ...
- Market Analysis. ...
- SWOT Analysis. ...
- Financial Analysis.
A good investment thesis constitutes three parts: (1) an observation of macroeconomic & industry trends and your company's positions within these trends, (2) a review of your company's ability to support growth, (3) a summary where you give your conviction on the company.
IC memos are the official document capturing the investment suggestion by the investment team of the fund to the committee and usually reviewed by limited partners who are considering investing in funds.
