If the market is so big there must be others after it, right? While some argue that competition is not a good thing, a Blue Ocean approach to entering the market shows you have thoughtfully evaluated where others have failed and understand how to attack those areas. How much value can you conceivably capture from this new offering? Be able to clearly define your market size and use the sections below to demonstrate how you will penetrate the market. How are you removing (extracting value from) that friction point? How are you improving the current solutions? What makes your solution or product offering unique and have an edge in the market? Market Size Define the problem you are solving and what the current process and pain point looks like. What point of friction are you attacking? Money is made at points of friction. Why should I care? What is the purpose of the memo? Are you searching for investment? Be clear and concise in your purpose so investors can quickly understand what the purpose of your company and memo is. When creating a memo for investment there are a few key components that the strongest investment memos will include: Purpose What should be included in an investment memo? Related resources: How To Write the Perfect Investor Update (Tips and Templates) The final step in a VC’s evaluation of an investment in your company is usually a Monday morning full partnership meeting.If you’re fortunate enough to get this far in the fundraising process, you’re not the only person in the hot seat anymore.” As the team at Rippling puts it, “It aligns more closely with the material you’re sponsoring GP will ultimately put together about the investment. As we mentioned above using a memo allows you to control the story if it does happen. When it comes down to it there is no way to know if a pitch deck or memo is going to be shared to outside stakeholders. This way you can spend time on the firms that are truly interested. Quick DecisionsĪ memo will allow investors to quickly pass or take the next meeting. Opposed to a pitch deck that may require a pitch and narrative around different components. Investors will be able to read and digest the memo on their own. By sending a memo in advance you do not have to worry about the investors missing any context. The investment memo has the ability to stand on its own. If there is simply an image or chart on a slide that can be deciphered in many different ways and can take the control of the story away from you. Oftentimes a pitch deck is passed around and can be taken out of context. More founders, especially those with strong writing skills, are turning to memos and written communication over the traditional pitch deck. Over the last few years, investment memos have become an integral tool of fundraising. Traditionally speaking a pitch deck is at the backbone of a venture capital fundraise. Related Resource: A Step-By-Step Guide for Building Your Investor Pipeline Ultimately, it can act as a source of truth to look back on post memo. If communicating with your team over a decision or project, it will keep everyone in the loop and on the same page as the project moves forward. If raising capital, it will keep your current and potential investors in the loop with your messaging and the status of your round. Investment memos are a surefire way to create alignment amongst your stakeholders. This not only helps you get a quick answer but also demonstrates that you value their time and sets an expectation for communication moving forward. By being able to clearly articulate why someone should invest in your startup, investors will be able to build conviction (as mentioned above) and move on. As we’ve mentioned in the past, venture fundraising is largely a relationship building game. When it comes to using investment memos for attracting investment it can be a great tool to build relationships. This is especially true when it comes to sharing an investment memo with potential investors but also holds true when using a memo for a product or strategic decision. Memos are an easy way for stakeholders to form conviction around an idea. They are becoming an increasingly important tool as communication continues to move to digital mediums. Investments memos are a powerful tool that can be used to power fundraising narratives, project guidelines, product pitches, and much more.
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