I am creating an investment memo for my startup, I am debating whether it should be a marketing document with lots of colors and figures or a black on white document with only words and a few graphs. Online I have seen both, so could a PE person give me some very basic guidance? Also, focus should be on risks instead of upside right?
color for sure. but it should never distract from the content. It should be clean & professional. any PE or IB dude will note the format of a memo and look for inconsistencies in presentation… your best outcome is that the format is glossed over and then not discussed. you won’t win a deal with it but a shitty memo is distasteful to a potential investor.
limit the pictures unless its IRR/cash flow sensitivity analysis and maybe a few charts/graphs.
Why would you think that?
In almost everything I’ve worked on for the last 10yrs, we emphasize the upside with CRAZY numbers, and don’t talk about risk much at all (that’s for the investors to figure out).
who’s your audience, institutional or individuals?
agreed why shoot yourself in the foot - be prepared for them to ask questions about the risks and have good answers but dont hand them anything on a platter to crush you with
I disagree. The standard is to identify risks and how you plan on mitigating them and highlight the fact (or fiction) that the opportunity gives exposure to lots of potential upside (highlight optionality and the fact - or fiction - that upside can come from any number of potential sources; only one thing has to go right, not everything) while at the same the downside potential is mitigated. Everyone wants to believe they are taking asymmetrical risk, so that is what you want to be selling.
If you are writing a memo for an investment committee it is a different use case than a memo informing clients of an idea. Given you are starting your own firm, I’m going to assume it is the latter (and that the IC is you). If my assumptions are correct, act accordingly.
PE is generally a Reg D situation, so you should probably google that to understand what you need to disclose. Really though, hire a lawyer or compliance consultant.
We do this a lot, inevitably someone from our side says “many swings at the ball” or “many bites at the apple” in the pitch meeting. And everyone in the audience makes/fakes an approving nod!
What happens when you have many free bites of the apple?
These metaphors need to be banned! Does it come from that game where you put your head in a tank of water and try to grab the apple with your mouth?
That’s a sick game
feedback to the nice folk that contributed, I went with the minimal color scheme, extended the “problem solved” part to match the length of the risk section and in the end I had 6 pages worth of stuff. So far presented to one dude but we not gucci, I fumbled the pitch in several points
get back up cubbie and make us proud