Investment Memo Generator
Structured frameworks for creating investment memos across VC, growth equity, PE, and public markets.
Investment Memo Structure
Standard Memo Sections
INVESTMENT MEMO OUTLINE:
1. EXECUTIVE SUMMARY (1 page)
- Company overview (one-liner)
- Investment thesis (3-5 bullet points)
- Key terms (valuation, round size, ownership)
- Recommendation (invest / pass / more diligence)
2. COMPANY OVERVIEW (1-2 pages)
- History and founding story
- Business model and revenue streams
- Product/service description
- Current stage and key milestones
3. MARKET ANALYSIS (1-2 pages)
- TAM / SAM / SOM sizing
- Market dynamics and trends
- Competitive landscape
- Regulatory environment
4. INVESTMENT THESIS (1-2 pages)
- Core thesis pillars (3-5)
- Differentiation / moat analysis
- Growth drivers
- Why now? (timing catalyst)
5. FINANCIAL ANALYSIS (2-3 pages)
- Historical financials summary
- Key metrics and unit economics
- Financial projections (base/bull/bear)
- Valuation analysis
6. MANAGEMENT TEAM (1 page)
- Founders and key executives
- Relevant experience and track record
- Gaps and hiring plan
- Reference check highlights
7. RISKS AND MITIGANTS (1 page)
- Key risks ranked by severity
- Mitigating factors for each risk
- Deal-breaker thresholds
8. TERMS AND STRUCTURE (0.5-1 page)
- Proposed terms
- Cap table impact
- Governance rights
- Liquidation preferences
9. RECOMMENDATION
- Clear invest / pass recommendation
- Conditions or contingencies
- Next steps and timeline
Due Diligence Frameworks
Diligence Checklist by Category
| Category | Key Questions | Sources | | --- | --- | --- | | Market | TAM accuracy? Growth rate? Tailwinds/headwinds? | Industry reports, expert calls, census data | | Product | Product-market fit evidence? Defensibility? Roadmap? | Customer interviews, product demo, NPS data | | Financial | Revenue quality? Unit economics? Cash runway? | Financial statements, data room, QofE report | | Team | Founder-market fit? Key person risk? Bench depth? | Reference checks, LinkedIn, prior exits | | Legal | IP ownership? Litigation? Regulatory exposure? | Legal counsel review, patent search | | Customers | Concentration risk? Churn? Expansion revenue? | Customer calls, cohort data, NRR analysis | | Technology | Tech debt? Scalability? Security posture? | CTO interview, code review, SOC 2 status |
Due Diligence Scoring Matrix
SCORING FRAMEWORK (1-5 scale per category):
Category Weight Score Weighted
────────────────────────────────────────────────
Market Opportunity 20% ___ ___
Product Strength 20% ___ ___
Financial Health 20% ___ ___
Team Quality 15% ___ ___
Competitive Position 15% ___ ___
Risk Profile 10% ___ ___
────────────────────────────────────────────────
TOTAL 100% ___/5.0
THRESHOLDS:
4.0-5.0: Strong invest
3.0-3.9: Conditional invest (address specific concerns)
2.0-2.9: Pass (but monitor)
< 2.0: Hard pass
Financial Model Integration
Key Metrics by Stage
| Metric | Seed / Series A | Growth (B-D) | Late Stage / PE | | --- | --- | --- | --- | | Revenue | ARR, MRR | ARR growth %, NRR | Revenue, EBITDA | | Efficiency | Burn multiple | Rule of 40 | EBITDA margin | | Unit Economics | Payback period | LTV:CAC | Gross margin | | Growth | MoM growth % | YoY growth % | Organic vs. M&A | | Retention | Logo retention | Net dollar retention | Customer churn | | Cash | Runway (months) | FCF burn rate | Free cash flow |
DCF Integration for Investment Memos
SIMPLIFIED DCF FOR MEMO:
Projection Period: 5-7 years
────────────────────────────────────────────
Year 1 2 3 4 5
Revenue ___ ___ ___ ___ ___
EBITDA ___ ___ ___ ___ ___
UFCF ___ ___ ___ ___ ___
PV Factor ___ ___ ___ ___ ___
PV of UFCF ___ ___ ___ ___ ___
Sum PV of UFCFs: ___
PV of Terminal Value: ___
Enterprise Value: ___
(-) Net Debt: ___
Equity Value: ___
Implied per share: ___
Current price: ___
Upside / (Downside): ___%
Comparable Analysis Template
COMPARABLE COMPANY TABLE:
Company EV/Rev EV/EBITDA P/E Growth% Margin%
────────────────────────────────────────────────────
Comp A ___ ___ ___ ___ ___
Comp B ___ ___ ___ ___ ___
Comp C ___ ___ ___ ___ ___
Comp D ___ ___ ___ ___ ___
────────────────────────────────────────────────────
Mean ___ ___ ___ ___ ___
Median ___ ___ ___ ___ ___
Target ___ ___ ___ ___ ___
PREMIUM / DISCOUNT JUSTIFICATION:
- Premium warranted if: higher growth, better margins, stronger moat
- Discount warranted if: smaller scale, higher risk, less proven
LBO Returns Summary
LBO RETURNS TABLE:
Bear Base Bull
Entry Multiple ___x ___x ___x
Exit Multiple ___x ___x ___x
Revenue CAGR ___% ___% ___%
EBITDA Exit $___ $___ $___
Equity IRR ___% ___% ___%
MOIC ___x ___x ___x
Cash-on-Cash ___x ___x ___x
Memo Templates by Type
Seed / Series A Memo Focus
EMPHASIS AREAS:
- Founder-market fit (60% of conviction at seed)
- Market size and timing thesis
- Product vision and early traction signals
- Capital efficiency and milestone plan
ACCEPTABLE GAPS:
- Limited financial history
- Unproven unit economics
- Incomplete team (plan to hire)
- No established moat yet
KEY QUESTION: "Can this team build this product in this market?"
Growth Equity Memo Focus
EMPHASIS AREAS:
- Proven product-market fit with metrics
- Scalable and repeatable go-to-market
- Unit economics at scale
- Path to profitability or Rule of 40
REQUIRED EVIDENCE:
- 12-24 months of cohort data
- Net revenue retention > 110%
- Improving or stable LTV:CAC
- Clear use of proceeds
KEY QUESTION: "Does this business scale profitably?"
PE / Buyout Memo Focus
EMPHASIS AREAS:
- Stable, predictable cash flows
- Margin expansion opportunities
- Debt capacity and coverage ratios
- Exit optionality (strategic, IPO, secondary)
REQUIRED ANALYSIS:
- Quality of Earnings (QofE)
- Working capital normalization
- Management incentive alignment
- Integration / value creation plan
KEY QUESTION: "Can we generate 20%+ IRR through operational improvement?"
Public Markets / Equity Research Focus
EMPHASIS AREAS:
- Valuation vs. intrinsic value
- Catalyst identification and timeline
- Risk/reward asymmetry
- Position sizing rationale
REQUIRED ANALYSIS:
- Multi-method valuation (DCF, comps, precedents)
- Sensitivity analysis on key assumptions
- Scenario-weighted expected return
- Liquidity and portfolio fit
KEY QUESTION: "Is the market mispricing this asset, and what unlocks value?"
Quality Checklist
Pre-Submission Review
| Check | Status | | --- | --- | | Executive summary is standalone (readable without full memo) | [ ] | | Investment thesis has 3-5 clear, testable pillars | [ ] | | TAM methodology is bottoms-up (not just top-down) | [ ] | | Financial projections have bear/base/bull scenarios | [ ] | | Risks section is honest (not just pro-forma) | [ ] | | Recommendation is clear and unambiguous | [ ] | | Sources cited for market data and claims | [ ] | | Valuation methodology is appropriate for stage | [ ] | | Cap table impact is modeled | [ ] | | Management references completed (min 3-5) | [ ] |
Common Pitfalls
AVOID THESE MEMO FAILURES:
1. THESIS WITHOUT EVIDENCE
Bad: "Large TAM with strong tailwinds"
Good: "TAM of $12B growing 18% CAGR per Gartner 2025, driven by
regulatory mandate effective 2026 (cite: HB-1234)"
2. HOCKEY STICK WITHOUT DRIVERS
Bad: Revenue 5x in 3 years
Good: Revenue 5x driven by: 2x ASP increase (upsell to enterprise),
1.5x customer growth (new sales hires), 1.7x NRR (product expansion)
3. RISKS WITHOUT MITIGANTS
Bad: "Key person risk on founder"
Good: "Key person risk mitigated by: strong VP Engineering hired Q3,
documented processes, board-approved succession plan"
4. VALUATION WITHOUT CONTEXT
Bad: "12x ARR is fair"
Good: "12x ARR represents 20% discount to median comp (15x) justified
by smaller scale but offset by 2x higher growth rate"
Memo Formatting Guidelines
FORMATTING STANDARDS:
LENGTH:
- IC memo: 8-15 pages (excl. appendix)
- Deal summary: 2-3 pages
- Quick screen: 1 page
VISUAL HIERARCHY:
- Executive summary: bold key numbers
- Use tables for comparisons (not paragraphs)
- Charts for trends (revenue, margins, cohorts)
- Red/yellow/green for risk ratings
APPENDIX ITEMS:
- Detailed financial model
- Full cap table
- Customer reference notes
- Competitive feature matrix
- Org chart
- Term sheet