Bear Case

The most plausible version of how an investment goes badly, argued seriously rather than as a token risk section.

Example

Customer acquisition costs keep rising, the company raises again at a lower price, and existing holders are heavily diluted.

A bear case written to be knocked down is worse than none, because it creates the appearance of having considered the downside.

Base Case — The outcome an investor considers most likely, as opposed to the optimistic or pessimistic scenarios.
Investment Memo — A written document setting out the case for and against an investment, the key assumptions, and the reasoning behind the decision, prepared before money moves.
What Would Have To Be True — A framing that lists the conditions that must hold for an investment to succeed, so each can be judged on its own plausibility.

Four sections decide the vote; the rest is context — A memo can run to fifteen pages and still be decided on four of them - the thesis, the bear case, the return math and the terms. Everything else is background that makes the reader feel informed without changing the answer. (11 min)
If you cannot write a good bear case, you do not understand the deal — A bear case built from generic risk categories teaches nothing. A bear case built from 'what would have to be true' names the specific number the whole thesis depends on. (12 min)
The memo is worth more at the two-year review than on the day you wrote it — A memo's real value is not in getting a deal approved. It is in being specific enough, on the day it was written, that reading it again later tells you something you could not otherwise have known. (10 min)