casemark/writing-investment-committee-memos

Writing Investment Committee Memos

When To Use

• Preparing a new deal for IC presentation (initial screening or final approval stage)
• Documenting a follow-on investment decision for an existing portfolio company
• Writing up a co-investment opportunity for LP or partner review
• Summarizing a deal that was passed on, for institutional memory
• Presenting a portfolio company add-on acquisition or recapitalization proposal

Inputs To Gather

• Company overview: Name, sector, geography, founding year, business model description
• Deal parameters: Transaction type (buyout, growth equity, venture, co-invest), proposed valuation, enterprise value, equity check size, expected ownership percentage, capital structure (debt/equity split)
• Financial data: Historical revenue, EBITDA, and margin trends (minimum 3 years); projected financials with stated assumptions; working capital and capex requirements
• Deal sourcing context: How the deal originated (proprietary, auction, intermediary), competitive dynamics, timeline and exclusivity status
• Management and governance: Key management bios, retention/rollover terms, board composition post-close
• Due diligence status: Completed workstreams (commercial, financial, legal, tax, environmental), open items and red flags
• Comparable transactions: Relevant precedent deals with entry multiples and outcomes
• Return analysis: Base, upside, and downside case IRR/MOIC projections with key drivers and sensitivities
• Risk factors: Identified risks ranked by likelihood and severity, with proposed mitigants
• ESG considerations: Material ESG factors, if applicable to the fund's mandate

Workflow

1. 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.

2. 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).

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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).

Output

The final IC memo should contain these sections in order:

• Executive Summary with recommendation
• Company and Market Overview
• Investment Thesis and Value Creation Plan
• Historical and Projected Financial Summary (with tables)
• Returns Analysis (base / upside / downside cases)
• Risk Assessment Matrix
• Due Diligence Summary and Open Items
• Comparable Transactions Table
• Recommendation and Proposed Terms
• Appendices (org chart, detailed financial model outputs, key contract summaries) as needed

Format as a professional document with numbered pages, consistent heading hierarchy, and source citations for market data and comparable transactions.

Quality Checks

• Every financial figure ties back to a named source (management data room, third-party report, public filing) — no orphaned numbers
• Return scenarios include at least three cases with clearly stated differing assumptions
• Risk section contains a mitigant for every High-impact risk; no risk left as "to be determined"
• Entry valuation is benchmarked against at least one set of comparables
• All projections extending beyond 2 years from the most recent actuals are tagged [VERIFY] if not supported by contracted revenue or backlog
• Deal terms section specifies the exact approval being requested from the IC
• Memo length matches the stage: screening memos do not exceed 4 pages; full IC memos target 8–15 pages
• No confidential information from other deals or portfolio companies is inadvertently included