investment-memo-generator

---
name: investment-memo-generator
description: Investment memo creation combining financial analysis, document generation, and structured templates. Use when creating investment memos, pitch decks, deal summaries, or investment committee materials.
---

# 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
```

## See Also

- [Finance](../finance/SKILL.md)
- `anthropic-skills:docx` (Anthropic document skill)
- `anthropic-skills:xlsx` (Anthropic document skill)
- [Business Strategy](../business-strategy/SKILL.md)