Investor Memorandum

---
name: investor-memorandum
description: Use when a founder needs the long investor document — "investment memo", "investment memorandum", "information memorandum", "IM", "business plan", "the document behind the deck", "something the partner can take to their IC". Handles both modes: the investor memorandum (8–20pp, VC/angel) and the operating business plan (15–40pp, banks, DFIs, grant committees). Not the deck (pitch-deck) and not the one-pager (investor-deal-sheet).
---

# Investment Memorandum

## What it is for

A partner who likes your deal has to sell it to people who never met you. The memorandum is the document they use to do that. Write it so it can be presented internally without being rewritten, and you have effectively written your own investment committee paper.

This is the most under-built document in founder-led fundraising, and the one with the highest leverage after the deck.

## Two modes

Decide which you are writing before you start; they are not the same document with different lengths.

|  | **Investment memorandum** | **Operating business plan** |
|---|---|---|
| Reader | VC / angel / family office | Bank, DFI, grant or government committee |
| Length | 8–20 pages | 15–40 pages |
| Optimises for | Return, and the risks to it | Executability, and repayment or impact |
| Financials | Drivers and a base case | Full three-statement, monthly year 1 |
| Tone | Argument | Plan of record |
| Must contain | Exit paths, return maths, dilution | Procurement, staffing plan, compliance, risk register |

If you need both, write the memorandum first and expand it. Going the other direction produces a memo that reads like a filing.

## The spine

Ten sections, one claim each. One page per section is the target for the memorandum mode; two to four for a business plan.

1. **Thesis** — the whole argument in 150 words, plus four stat tiles. Written last.
2. **Problem** — specific, quantified, dated. Whose problem, what it costs them today.
3. **Solution** — what you built and sell. What is hard about it, and why that hardness is durable.
4. **Market** — size with a cited source, structure, and who else is in it. Name real competitors, including the ones that scare you.
5. **Business model** — revenue lines, rates, the unit, gross margin, and why the revenue recurs.
6. **Traction** — signed, delivered, measured. The evidence section.
7. **Risk** — the five things that could kill this, each with what you are doing about it.
8. **Financials** — drivers, not just outputs. Three or four assumptions the whole model hangs on.
9. **Return** — entry, base case exit, dilution to that point, comparable transactions.
10. **Team** — why these specific people, with the scar tissue that is relevant to *this* problem.

Order matters. Risk before financials, not in an appendix: a reader who finds the risks buried stops trusting the numbers that preceded them.

## Judgment

**Write the risk section as if you were the sceptic on the deal team.** The five risks should be the five an investor would actually name, not five soft ones you can dismiss. Include the one you are afraid of. Stating a real risk with a real mitigation converts more scepticism than any strength you could claim, because it proves you understand your own business. Hiding it guarantees it surfaces in IC without your framing.

**Every page is one claim.** Each section title asserts something ("Recurring revenue that grows as customers move up the stack"), and the lead sentence under it states the claim plainly. A reader skimming section titles alone should get a coherent argument. Topic-label headings ("Business model") waste the most valuable line on the page.

**Never expand deck bullets into paragraphs.** It is instantly recognisable and reads as padding. The memo's job is the connective tissue the deck omits: why this follows from that, what you considered and rejected, what would have to be true.

**Source every number inline.** Internal figures name the model file and tab. Third-party figures name the source and its date. A memo with an uncited market size gets its market size discounted to zero, and the doubt spreads to your own numbers.

**Show the drivers, not just the outputs.** A revenue chart going up-and-right proves nothing. Three assumptions with their values and what happens if each is wrong proves you built the model rather than fitted it.

**Say what would make you walk away.** One paragraph on the conditions under which this plan is wrong. Almost no founder does this, and it is disproportionately persuasive to serious investors.

## What good looks like

- **Forwardable alone.** First page restates the one-liner and the round terms. It will get separated from the deck.
- **Passes the "what's the catch" test.** A reader finishes it without a major unanswered objection. If they have one, it belonged in the risk section or the FAQ.
- **Nothing is only in a chart.** Every chart's point is also stated in a sentence. Charts get lost in PDF re-renders and screen readers.
- **Numbers reconcile.** Every figure traces to the model and matches the deck, the deal sheet and the FAQ. Mechanically verified, not eyeballed — see `investor-fact-ledger`.
- **Length matches the cheque.** 40 pages for a $500k pre-seed reads as inexperience; 4 pages for a Series A reads as thin.
- **The last page is the ask**, restated with the milestone the money buys.

## Gotchas

- **The market section as a wall of analyst figures.** Three cited numbers that matter beat fourteen. Investors discount TAM slides; they do not discount a bottom-up build of your first 100 customers.
- **Competitors omitted or strawmanned.** A reader who knows a competitor you didn't name assumes you don't know your market. Name them and be precise about the difference.
- **"Conservative" projections.** Everyone says it; nobody's are. Delete the word and show the driver instead.
- **A team section that is a list of logos.** What matters is the specific thing each person has done that is load-bearing for this plan.
- **Writing the thesis first.** It will be wrong. Write it after the other nine sections, then cut it to 150 words.
- **Passive hedging.** "It is anticipated that revenue may grow" — say who expects what, and on what basis. Hedged prose reads as a lack of conviction, which is the one thing you cannot afford in this document.
- **A business plan padded to look substantial.** Committees read these professionally and recognise padding immediately. 18 dense pages beat 40 loose ones.

## Worked example — a risk entry

Weak:

> **Market risk.** The market is new and adoption may be slower than expected. We will mitigate this with strong marketing and a focus on customer success.

Strong:

> **Adoption depends on one procurement cycle.** 71% of our 2028 revenue comes from public-sector buyers whose budgets are set in a single annual cycle (November). A slipped cycle moves revenue by a full year, not a quarter — this is the single largest timing risk in the plan.
>
> *What we are doing:* two of the three signed contracts are multi-year with the first year already appropriated, which removes them from the 2028 cycle entirely. We are holding 18 months of buffer past the milestone so a slipped cycle does not force a raise. And the commercial line, 29% of 2028 revenue, is on a different cycle and is deliberately being grown first.
>
> *What we cannot fix:* if the November cycle slips two years in a row, this plan needs re-basing and we would raise earlier at a lower price.

The second version is longer and it makes the deal more fundable, because it is the analysis the deal team was going to have to do anyway.