| name | Deal Memo |
| description | Write the memo so a reader can tell which claims were checked and what the decision turns on. |
| category | Investing |
Deal Memo
A memo reads as uniformly confident whatever its sourcing. This skill exists to
break that: the reader must be able to tell, without asking, which sentences
somebody verified.
When to use
- A company reaches investment committee.
- A pass needs a reason worth keeping.
Steps
- Open with the question the deal turns on. One sentence. If it cannot be
written, the diligence is not finished, however much of it there is.
- State the thesis fit — or why this is an exception worth making. An
exception nobody names as one becomes the new thesis by accident.
- Write the checked claims with their method, from
diligence. Customer
calls, code review, data room, references.
- Write the unverified claims in their own section, explicitly labelled.
This is the section that makes the memo honest, and it is the one that gets
quietly merged into the body under time pressure.
- Give the case against. A memo with no bear case has not been written by
somebody who tried.
- Recommend, and say what would change the recommendation. The decision is
the operator's; the reasoning is this firm's.
Output
A memo whose verified and unverified claims are visibly separate, with the
question the deal turns on at the top and a bear case that somebody actually
constructed. No valuation, no terms, no commitment.
