The Investment Memo & IC

How to write an investment memo that makes a real case, and how an investment committee process pressure-tests a decision before it's made.

Making the case, in writing, before the money moves

Lessons

• A memo is a thinking tool before it is a selling document — Two versions of the same memo can describe the same deal and do opposite jobs - one is written to get to yes, the other is written to find out whether yes is correct. (9 min)
• 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 committee's job is to break the memo, not approve it — An investment committee that never says no has stopped being a check on anything. The difference between a real pressure test and a rubber stamp is almost never visible from the approval rate alone. (13 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)
• Amend, date and keep the original - never quietly rewrite — A memo is a record of reasoning at a moment. When facts change, add a dated amendment rather than editing the original, so the evolution of your thinking stays visible and reviewable. (10 min)

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