Small Guide to the Investment Memo
VCA #4
Welcome to my new newsletter, Venture Capital & Alii! Today, I am here to discuss the importance of the Investment Memo in VC. This is based on my personal experience and perspective. I won’t be going into too much detail to keep it accessible for everyone, and I might miss a few elements — feel free to reach out if you need any additional information.
I have always had a deep desire to connect with the world of venture capital since the beginning of my university studies. I have pursued multiple experiences to get closer to venture capital. These complementary experiences have allowed me to acquire a background of technical skills, but I still lacked a complete mastery of an essential element in this venture capital learning process: knowing how to properly analyze a startup.
Indeed, one of the major tasks of an operator in the venture capital industry is to analyze investment opportunities in promising startups and determine (or not) their potential for exponential returns. To do this, some investors do not hesitate to write an investment note or Investment Memo to formalize their viewpoint on the opportunity. This is my opportunity to delve into the various points discussed in this previous article, particularly the different investment criteria considered by a VC.
Investment Memo ?
Where the modern Venture Capitalist is a hurried person, extremely solicited and required to process a significant flow of information in a very short time. This person also receives a large number of Pitch Decks from entrepreneurs looking to raise funds (topic already discussed below).
In addition to a selection that can be made based on the format of the Pitch Deck (inappropriate number of pages, missing content, etc.), the selection is drastically made in-depth by the Venture Capitalist. However, the criteria for evaluating investments can differ from one investor to another, highlighting the need for each to present an Investment Memo outlining the favorable reasons for the fund to invest.
This Investment Memo is an essential decision-making document, typically one page in length. I have had the opportunity to write several notes on a number of startups. This is a recurring task that follows the same key points but takes time and therefore needs to be organized.
To illustrate this, I designed this template for an Investment Memo aimed at investors, entrepreneurs, fundraisers, or curious individuals. You can easily copy and/or download this Google Sheets template to modify it. A small note: not all fields need to be filled in; it depends on the company's stage of maturity.
Thank you for reading this article! What specific topics in VC or regarding software would you be interested in? Feel free to share your feedback 🌐 and give a ❤️ if you enjoyed it!