investment-memo

SKILL.md

Investment Memo Skill

Overview

I help you write professional investment memorandums (IC memos) for various contexts: venture capital, private equity, hedge funds, or internal investment committees. I structure the investment thesis, analyze risks, and present clear recommendations.

What I can do:

Structure investment thesis clearly

Summarize key due diligence findings

Analyze risks and mitigants

Present valuation and returns analysis

Draft actionable recommendations

Format for investment committee review

What I cannot do:

Conduct primary due diligence

Provide investment recommendations as advice

Access proprietary deal data

Replace professional investment judgment

How to Use Me

Step 1: Provide Investment Context

Tell me:

Type of investment (VC/PE/Public/Credit)

Company/deal overview

Investment amount and terms (if known)

Your firm's investment criteria

Step 2: Share Due Diligence Findings

Provide:

Company background and financials

Market and competitive analysis

Management assessment

Key risks identified

Valuation analysis

Step 3: Specify Memo Format

Standard IC Memo: Full formal memo

Deal Summary: 1-2 page overview

Quick Take: Brief investment thesis

Follow-on Memo: Update on existing position

Memo Structure

VC Investment Memo

1. Executive Summary
   - Company, stage, ask
   - Investment thesis in 3 bullets
   - Recommendation

2. Company Overview
   - Problem/Solution
   - Product and traction
   - Business model

3. Market Opportunity
   - TAM/SAM/SOM
   - Market trends
   - Timing

4. Team
   - Founders background
   - Key hires
   - Board/advisors

5. Competitive Landscape
   - Key competitors
   - Differentiation
   - Moat potential

6. Traction & Metrics
   - Key KPIs
   - Growth trajectory
   - Unit economics

7. Investment Terms
   - Round size, valuation
   - Pro-forma cap table
   - Use of funds

8. Risk Analysis
   - Key risks and mitigants

9. Recommendation
   - Investment decision
   - Ownership target
   - Value-add plan

PE Investment Memo

1. Executive Summary
2. Investment Thesis
3. Business Overview
4. Industry Analysis
5. Financial Performance
6. Management
7. Transaction Overview
8. Value Creation Plan
9. Financial Projections
10. Returns Analysis
11. Risk Factors
12. Recommendation

Output Format

# INVESTMENT MEMORANDUM
## [Company Name]

**Prepared for**: [Investment Committee / Fund Name]
**Date**: [Date]
**Prepared by**: [Analyst Name]
**Classification**: Confidential

---

## EXECUTIVE SUMMARY

### The Opportunity
[2-3 sentence description of the company and investment opportunity]

### Investment Ask
| Metric | Details |
|--------|---------|
| Round | [Series X / LBO / etc.] |
| Amount | $[X]M |
| Pre-money Valuation | $[X]M |
| Our Investment | $[X]M for [X]% |
| Lead/Co-invest | [Lead / Co-invest] |

### Investment Thesis
1. **[Thesis Point 1]**: [1-2 sentence explanation]
2. **[Thesis Point 2]**: [1-2 sentence explanation]
3. **[Thesis Point 3]**: [1-2 sentence explanation]

### Key Risks
1. [Risk 1]
2. [Risk 2]
3. [Risk 3]

### Recommendation
**[INVEST / PASS / MORE DILIGENCE NEEDED]** at $[X]M for [X]% ownership

---

## 1. COMPANY OVERVIEW

### Background
[Company history, founding story, key milestones]

### Problem & Solution
**Problem**: [What problem does the company solve?]
**Solution**: [How does the company solve it?]

### Business Model
[How the company makes money]

| Revenue Stream | Description | % of Revenue |
|----------------|-------------|--------------|
| [Stream 1] | | |
| [Stream 2] | | |

### Product
[Description of product/service, key features, differentiation]

---

## 2. MARKET OPPORTUNITY

### Market Size
| Segment | Size | Growth | Notes |
|---------|------|--------|-------|
| TAM | $[X]B | [X]% | |
| SAM | $[X]B | [X]% | |
| SOM | $[X]B | [X]% | |

### Market Trends
1. [Trend 1]
2. [Trend 2]
3. [Trend 3]

### Why Now?
[Market timing thesis]

---

## 3. COMPETITIVE LANDSCAPE

### Competitive Position
[How the company positions against competitors]

### Key Competitors
| Competitor | Funding | Strengths | Weaknesses |
|------------|---------|-----------|------------|
| [Comp 1] | $[X]M | | |
| [Comp 2] | $[X]M | | |

### Sustainable Advantages
- [Moat 1]
- [Moat 2]

---

## 4. TEAM

### Founders
| Name | Role | Background | Equity |
|------|------|------------|--------|
| | CEO | | |
| | CTO | | |

### Management Assessment
[Quality of team, gaps, hiring plans]

### Board Composition
[Current board, proposed board seat]

---

## 5. TRACTION & METRICS

### Key Performance Indicators
| Metric | Current | 12M Ago | Growth |
|--------|---------|---------|--------|
| ARR/Revenue | $[X]M | $[X]M | [X]% |
| Customers | [X] | [X] | [X]% |
| [Key Metric] | [X] | [X] | [X]% |

### Unit Economics
| Metric | Value | Benchmark |
|--------|-------|-----------|
| CAC | $[X] | |
| LTV | $[X] | |
| LTV/CAC | [X]x | >3x good |
| Payback | [X] months | |
| Gross Margin | [X]% | |

---

## 6. FINANCIALS

### Historical Performance
| ($M) | Year -2 | Year -1 | Current | Y+1 Proj |
|------|---------|---------|---------|----------|
| Revenue | | | | |
| Gross Profit | | | | |
| EBITDA | | | | |
| Net Income | | | | |
| Cash | | | | |
| Burn Rate | | | | |

### Cash Position & Runway
- Current cash: $[X]M
- Monthly burn: $[X]M
- Runway: [X] months

---

## 7. INVESTMENT TERMS

### Deal Structure
| Term | Details |
|------|---------|
| Security | [Preferred / Common / Convertible] |
| Valuation | $[X]M pre / $[X]M post |
| Round Size | $[X]M |
| Our Investment | $[X]M |
| Ownership | [X]% |
| Board Seat | [Yes/No] |

### Key Terms
- Liquidation Preference: [X]x [participating/non-participating]
- Anti-dilution: [Broad-based weighted average]
- Pro-rata Rights: [Yes/No]
- [Other key terms]

### Cap Table (Pro-forma)
| Shareholder | Pre-round % | Post-round % |
|-------------|-------------|--------------|
| Founders | | |
| Existing Investors | | |
| Option Pool | | |
| This Round | | |

### Use of Funds
| Category | Amount | % |
|----------|--------|---|
| [Use 1] | $[X]M | |
| [Use 2] | $[X]M | |
| [Use 3] | $[X]M | |

---

## 8. RETURNS ANALYSIS

### Investment Scenarios
| Scenario | Exit Value | Multiple | IRR | Probability |
|----------|-----------|----------|-----|-------------|
| Base | $[X]M | [X]x | [X]% | [X]% |
| Bull | $[X]M | [X]x | [X]% | [X]% |
| Bear | $[X]M | [X]x | [X]% | [X]% |

### Exit Considerations
- Potential acquirers: [List]
- IPO potential: [Assessment]
- Timeline: [X-Y years]

---

## 9. RISK ANALYSIS

### Key Risks and Mitigants
| Risk | Likelihood | Impact | Mitigant |
|------|------------|--------|----------|
| [Risk 1] | H/M/L | H/M/L | |
| [Risk 2] | H/M/L | H/M/L | |
| [Risk 3] | H/M/L | H/M/L | |

### Deal-Specific Risks
- [Risk specific to this transaction]

---

## 10. RECOMMENDATION

### Investment Decision
**[INVEST / PASS / CONDITIONAL]**

### Rationale
[3-4 sentences summarizing why this is or isn't a good investment]

### Proposed Terms
- Investment amount: $[X]M
- Target ownership: [X]%
- Board seat: [Yes/No]
- Key conditions: [If any]

### Post-Investment Value Add
1. [How we can help the company]
2. [Strategic introductions]
3. [Operational support]

### Next Steps
1. [Action item 1]
2. [Action item 2]
3. [Action item 3]

---

## APPENDICES

### A. Detailed Financial Model
### B. Customer References
### C. Technical Due Diligence
### D. Legal/IP Review
### E. Background Checks

---

*Prepared by [Fund Name] Investment Team*
*This memorandum is confidential and for internal use only*

Tips for Better Results

Provide all available data for more complete analysis

Specify your fund's criteria (stage, check size, sectors)

Include any concerns you want addressed

Mention comparable deals for benchmarking

Indicate urgency if timeline matters

Limitations

Cannot conduct primary diligence

Analysis based on provided information only

Does not replace IC discussion and judgment

May not reflect latest market data

Not investment advice

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