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Venture Capital 101 : The Guide for Everything you Need

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Venture Capital 101 : The Guide for Everything you Need

On Writing Investment Memos

How To: Write an Investment Memo

Sections to Include on an Investment Memo

Deal Overview + Terms

Usually the first section of the memo, explains the basics of the deal and an overview of the company

Things to Include

Valuation

Your Allocation

Who are its current investors

Stage, sector, location

Overview

A quick 1-2 paragraph summary of what the company does and what problem they are trying to solve

Product Summary

Explains what product the startup is selling and what makes the product unique

Market Sizing

This section is a mini deep dive on the sector/market the startup you are working on is targeting.

Be sure to include the current scope/demographics of potential users, the future of the sector, the market spending potential, and leaders in the space.

Team

High level overview of Executive/Founding Team’s bios including past work experience, their domain expertise, their roles at the current startup

Revenue Model

Some startups do not have this in the pre-seed stage so the scale of the revenue model/financials depends on each startup you are talking to

For Early Stage

Might have a few lines on their pricing strategy, how they project users to scale, MoM revenue growth

For Late Stage

Will have to build more advanced financial models detailing revenue projections, growth projections, analysis on valuations and more due to having access to detailed financial history

Traction

This section is the highlight the key process a startup has made

Include key partnerships and LOIs

Results of Beta tests

Short term & long term vision (what is next on the roadmap)

Crucial for readers to understand how this company plans to grow and scale to become a billion dollar business

Competitors

Who are the main players in the space?

This section is crucial as it is important to understand what other companies are in the space and doing research can convince you on if the company you want to invest in is the leader in that space

Highlight direct competitors (usually other startups working on the same idea) and indirect competitors (usually bigger cos like Amazon, Google, etc)

How does [company] fit your fund thesis?

If you work at a fund or have your own fund, all your investments must fit your investment thesis

Why is xyz startup is a great investment and how it fits specifically to your thesis

More examples of investment memos can be found

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Shopify Investment Memo⁠

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Sword Health Investment Memo⁠

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Twitch Investment Memo⁠

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Toast Investment Memo⁠

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