In-Depth Guide

VC Deal Memo

This guide is for startup scouts, venture capital associates, general partners, or other startup or venture capital investment professionals looking to create their own deal (or investment) memo.

What is a Deal Memo?

What is a Deal Memo?

What is a Deal Memo?

What is a Deal Memo?

An investment deal memo is a document that summarises the startup and the opportunity behind it in a concise, single-page format.

It's typically used by investors, startup scouts, and even startup entrepreneurs themselves during the fundraising process.

When bringing a deal, a deal memo can provide context for you and the investors when looking at opportunities. Specifically, it provides context for the major assumptions behind your model for success, what is driving those assumptions and how you will know if they are correct or not.

How is a deal memo useful?

It helps everyone understand what information they need to answer their key questions (also called "pain points") around an idea or product. Those answers are the key to getting a yes or no on an investment decision and moving on to the next opportunity.

How do I use an investment deal memo?

The best way to use an investment deal memo is as a way of clearly articulating your assumptions, the key metrics that prove those assumptions correct and how your investment recommendation will succeed.

What is the difference between a pitch deck and a deal memo?

While both documents may contain similar elements, it's. theangle from which each is written that makes the difference.

Traditionally a pitch deck is created by the startup entrepreneurs. Its goal is for the founders to communicate their business idea, achievements, and where they're heading. The pitch deck usually takes the form of a presentation. A pitch deck may be biased as it is written by the same people who are seeking an investment.

In comparison, a deal memo is created by an investor to make the case for an investment and to make an investment decision on whether or not to proceed to the next phase of due diligence. The deal memo usually takes the form of a document. And although it's written by someone who would like to proceed with making an investment, a deal memo can be more objective since it's written by a third-party and not the startup's founders themselves. For example, a deal memo may also include reasons for not investing, foreseen challenges, and weaknesses of the startup.

Both a pitch deck and a deal memo contain similar elements like the business opportunity, market size, team, traction and valuation.

Elements of a Successful Deal Memo

Deal Memo Examples

Airbase Deal Memo (Menlo Ventures)

This is the investment memo that was used by Airbase to raise their $60M series Series B funding led by Menlo Ventures. They shared it publicly soon after their fundraise was complete.

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On Deck Deal Memo (Founders Fund)

An inside look into the deal memo that the On Deck team used to raise their $20 million Series A round led by Founders Fund. The On Deck team shared it with the startup community because they believed that it it was a better alternative to a pitch deck.

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Youtube Deal Memo (Sequoia)

This is the confidential YouTube investment memo that Sequoia general partner Roelof Botha wrote to the rest of the investment committee at Sequoia. It was released as part of a lawsuit between Viacom and Google (after acquiring Youtube) related to Youtube's early copyright infringement issues.

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Twitch Deal Memo (Bessemer Venture Partners

This is the investment memo that Bessemer Venture Partners did when they invested in Twitch soonafter its pivot from It was publicly shared by Ethan Kurzweil, a partner with Bessemer Venture Partners, after Twitch's successful acquisition by Amazon for roughly $1 billion.

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Deal Memo Templates

Related Questions

What is the difference between a pitch deck and a deal memo?

While both documents may contain similar elements, it's the angle from which each is written that makes the difference.

Read full answer »

Related Terms

Investment Memo

An Investment Memo is a document prepared by a venture capital firm outlining the reasons for investing in a particular startup or innovation. It includes an overview of the company, an analysis of the market and the potential return on investment. The memo should be clear and concise, and should demonstrate a strong understanding of the venture and the sector in which it operates. The tone should be friendly and supportive.

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Venture Capital

Venture Capital (VC) is a form of financial investment made into a business or startup with the expectation of a high potential return. VC is often used to fund high-risk projects, such as those in the early stages of development, in order to help businesses grow, innovate and expand. VC investors typically provide not only financial capital, but also knowledge and expertise to help a business succeed.

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Venture Partner

A venture partner is an investor or advisor who works with startups or established companies to provide financial and strategic advice. They are often experienced in venture capital, innovation, and entrepreneurship, and offer guidance on the growth of businesses and investments. Venture partners help with fundraising, strategy, and portfolio management, and can offer invaluable advice and expertise to help startups succeed.

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Investment Allocation

Investment allocation is an important decision when investing in startups, innovations, and venture capital. It is the process of dividing capital across different asset classes to ensure a balanced portfolio. The idea is to spread risk, maximise returns and minimise potential losses. Investment allocations should be tailored to suit individual goals and needs and take into account the potential risks and rewards of each asset class.

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Investment Carry

Investment carry, also known as ‘carry’, is the portion of profits earned by venture capital investors from their investments in a startup or other venture. It is typically received after all other investors have received their return on investment. Investment carry is often used to incentivise venture capital investors and is seen as an important component of venture capital economics.

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