The memo investors write about you behind closed doors.
No investor decides alone. Before you get a term sheet, someone in that fund has to write a paper convincing their partners to say yes. Your entire raise, every meeting, every email, every answer you give, is raw material for that document.
Below is what it actually looks like. This is the investment committee paper structure I worked with at Octopus Ventures, one of Europe's largest VCs, with my notes on what the investor is really thinking at each section. Read it once and you'll never walk into an investor meeting the same way again.
Investment Committee Paper
What a VC sends their partners before proposing a term sheet. Gold notes are my commentary.
Company title
The header every partner sees first: the numbers before the story.
Meeting scores. Each investor who met you scores the company.
These are the scores of the team: whether they want to invest, liked, or disliked the company. Every person who met you gets a vote before you ever see a term sheet.
Feedback from everyone who met the business.
This is detailed feedback given by each member who attended the meeting. The associate who sat quietly in the corner of your pitch? Their opinion is in here too.
Company summary
One sentence to describe the company. Why is it pioneering or a trend-setter?
Sector
What market is the company operating in?
Team analysis
Every dimension of the team gets rated:
This is colour-coded on how the whole investment team felt about each parameter. Team bios follow, and they will be brutally honest about how we feel about each team member. There's also a section on future hires: what the team needs to look like in 1 to 3 years.
Product analysis
What the product actually is, USPs against competitors, where it shines, and what's next in the product portfolio.
Market analysis
The overall market, how much businesses or customers spend on current services, competitor comparisons and revenues, and any compliance the market demands.
This needs to be done top-down (total revenue of the market) as well as bottom-up (if the company services X amount of the market, revenues would be Y). If your deck only has the top-down version, the investor is doing the bottom-up maths without you in the room.
Business model
How the company makes money: per user, B2B2C, D2C, and so on.
Unit economics go here, scrutinised hard, along with how we think they may change in the future. These are the numbers we believe after doing our own work, and they often look very different from the ones in your deck.
Financial analysis
Analysis of previous months and years. What it would take to hit the budgeted future revenues, and whether that makes sense. Assumption-tested financials and forward-looking revenue potential.
Note the phrase "potential, and probably wrong". Investors assume your forecast is wrong. What they're testing is whether your assumptions are intelligent.
Exit potential
Which companies would most likely acquire this business, what size they are, what they've bought in this market before, and recent exits with their valuation multiples.
Those multiples get compared against your revenue forecast to model what exit valuation could happen. Your fund-returner maths is being done for you, whether you present it or not.
Risks
The main risks of the company.
These usually are:
- Gaps in the team's expertise
- Product potentially being a "nice to have" instead of a "need to have"
- Scalability problems on the ops side, the sales side, or both
- Data sets lacking enough information, or a lack of historical data
- Competition
Deal team view
The honest view on what the deal team likes and dislikes about the company, and why they want to invest.
Proposed investment terms
The terms proposed for discussion at the investment committee meeting.
This includes things such as:
- Total round investment and total investment from the VC
- Minimum fully diluted percentage stake
- Pre-money and post-money valuations from this
- Option pool expansion
- Share class (usually 1x non-participating at Series A, nothing before that)
- Board composition
- Legal fees
- Other terms specific to the company, like new hires needed to plug current team gaps
What does success look like (to the next fundraise)?
Basically KPIs and budget for the next 18 months. What is needed for the company to raise its next round, and is it realistic? Investors are underwriting your next raise before they've done this one.
What would make us think twice about following on?
The conditions under which the fund would not do its pro-rata in the next round.
Due diligence undertaken
What DD has already happened before you see a term sheet. Examples include:
- Product demo
- Site visit
- Glassdoor reviews
- Founder reference calls
- Customer calls
- Financial model review (a basic pass before deeper DD post-term-sheet)
- Expert feedback
- Competitive landscape
- Share capital table review
Areas for further due diligence and actions required
What still needs checking before or after the term sheet.
Appendix 1: Team analysis
A more in-depth CEO analysis. This will be very honest about you as a CEO. Reference calls, pattern-matching, the lot.
Appendix 2: Draft share cap table post-investment
Exactly what your cap table looks like the day after they wire.
Your pitch has one job: write this memo for them.
The investor who champions you has to defend every section of that paper in front of their partners. If your narrative hands them the company summary, the bottom-up market maths, the honest risk answers, and the exit logic, the memo almost writes itself, and your champion walks into that room armed.
If you leave gaps, they fill them without you. That's where raises quietly die: in the memo, long after the meeting ended.
Real memos from real funds
Read how the best funds actually argued for their winners.
Tier-1 VC. Bessemer's memos from their best investments, like Shopify and LinkedIn.
Read →Tier-1 VC. News and blogs on why they invested.
Read →Tier-1 VC. Why they invested in their portfolio, including some written by me.
Read →Tier-1 VC. Look for the "why we invested" pieces.
Read →Tier-1 seed VC. Why they invested in their portfolio.
Read →Not full memos, but you can see why they invested in each company. Roblox linked as the example.
Read →USV's investment thesis and why they invest. Compare with the 3.0 version to see how their thinking changed.
Read →The updated thesis, six years on.
Read →Not super detailed, but to the point.
Read →AirTree VC's investments and why they invested.
Read →Pre-seed and seed investor on how they write the investment memo.
Read →The memo that raised their $60M Series B in 10 days, written by the founder.
Read →152+ memos from his angel investments.
Read →His memo template.
Read →Biotech example of an investment memo.
Read →His example of NextView investment memos.
Read →The nine components of why they invest, with an open-source deal memo template.
Read →A template made for people breaking into VC. Still a good way to see how VCs think.
Read →Written for VC interviews, but a useful basic resource on memo structure.
Read →Want the memo written in your favour?
The system that's helped 120+ founders raise $250M+ builds your network, narrative, and process so your champion walks into the partner meeting armed.