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Confirm memo stage and format — Determine whether this is a screening memo (2–4 pages, high-level thesis and key risks) or a full IC memo (8–15 pages, comprehensive analysis). Confirm the fund's standard template and section ordering if one exists.
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Draft the Executive Summary — Lead with the investment recommendation (approve/decline/table for further diligence). State the deal thesis in 2–3 sentences: why this asset, why now, why this price. Include headline deal terms (EV, entry multiple, equity check, target return).
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Write the Company and Market Overview — Describe what the company does, its competitive positioning, and the end-market dynamics. Quantify the total addressable market. Identify secular tailwinds or headwinds. Keep this section factual; save the interpretive lens for the thesis section.
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Articulate the Investment Thesis — Present 3–5 discrete value-creation levers (e.g., organic revenue growth, margin expansion via operational improvements, M&A-driven multiple expansion, working capital optimization). Each lever should have a quantified impact tied to the financial model.
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Present the Financial Analysis — Summarize historical performance, the management case, and the sponsor case. Include an LBO or returns waterfall showing the path to target IRR/MOIC. Present sensitivity tables on entry multiple, exit multiple, revenue growth, and margin assumptions. Flag any hockey-stick projections with [VERIFY] tags.
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Detail the Risk Assessment — Organize risks into categories: market/cyclicality, customer concentration, management/key-person, regulatory, financial leverage, and execution. For each risk, state the mitigant or the monitoring mechanism. Rank risks as High / Medium / Low impact.
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Summarize Due Diligence Findings — Report key findings by workstream. Highlight confirmatory findings that support the thesis and any findings that challenge it. List open diligence items with expected completion dates.
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Include Comparable Transactions and Public Comps — Provide a table of 5–10 precedent transactions with date, EV, EV/EBITDA, and EV/Revenue multiples. If public comparables exist, include current trading multiples. Note where the proposed entry valuation sits relative to these benchmarks.
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State the Recommendation and Proposed Terms — Restate the recommendation. Outline proposed deal structure, governance rights, key protective provisions, and any conditions to closing. Specify the approval being requested (e.g., authorization to submit a binding offer at up to $X EV).
Format as a professional document with numbered pages, consistent heading hierarchy, and source citations for market data and comparable transactions.
