What’s an Investment Memo? Guide for Startup Founders

If you're a startup founder navigating your first funding round, you've probably come across the term “investment memo.” But what exactly is it, and why does it matter?

An investment memo is not just a document; it’s a powerful tool. It helps founders crystallize their startup’s mission, market opportunity, and business strategy for potential investors. Whether you're approaching angel investors, VCs, or internal investment committees, this memo could make or break your deal.

Let’s dive into what it is, why it matters, and how you can create a compelling one.

What Is an Investment Memo?

An investment memo is a written document that outlines the key details of a startup and the terms of the investment being proposed. While it's traditionally written by investors for internal use, startup founders increasingly write their own versions to proactively shape the investment narrative.

It’s a way to communicate your business clearly and concisely. Think of it as a written pitch deck, minus the slides, plus a lot more clarity.

Common Sections in an Investment Memo:

• Company Overview

• Problem and Solution

• Product and Technology

• Market Opportunity

• Traction and Metrics

• Business Model

• Go-to-Market Strategy

• Competitive Landscape

• Team

• Risks and Mitigation

• Investment Terms and Use of Funds

• Exit Strategy

Why Every Founder Should Write One

Even if you’re not required to submit an investment memo, drafting one forces you to clarify your thinking. It can:

• Sharpen your pitch: You’ll be better prepared to answer tough investor questions.

• Build trust: It signals professionalism and thoughtfulness.

• Align the team: Everyone from co-founders to advisors understands the game plan.

• Improve fundraising success: Investors love clarity, and this provides it.

When to Use an Investment Memo

• Before reaching out to investors

• As a leave-behind after meetings

• To align with co-founders and internal teams

• For investor syndicates or shared deals

Example Investment Memo Structure

Here’s a simple format you can follow as a founder:

1. Executive Summary

Brief overview of what your company does, the market, traction, and how much you're raising.

2. The Problem

Explain the pain point you’re solving and who experiences it.

3. The Solution

Introduce your product or service and how it uniquely solves the problem.

4. Market Opportunity

How big is the market? What's the TAM (Total Addressable Market)? Why now?

5. Product and Tech

Highlight your product’s core features, roadmap, and any tech differentiators.

6. Traction

List key metrics, revenue, users, retention, MRR/ARR, etc.

7. Business Model

How do you make money? Any early revenue, pricing tiers, or freemium models?

8. Go-to-Market

Your growth strategy, organic, paid, partnerships?

9. Competitors

Who else is in this space, and how are you different?

10. Team

Who’s building this? Highlight founders and key team members.

11. The Ask

How much are you raising? What stage is the round? What will you use the money for?

12. Exit Opportunities

Potential exit paths, acquisition, IPO, etc.

Tools to Help You Build Your Investment Memo

Creating a solid memo doesn’t mean doing it all manually. Here are some tools that can help:

• Notion or Google Docs: Great for collaborative drafting.

• Plox (plox.in): Safely share your memo with potential investors and track document views, time spent on each section, and who viewed it, perfect for iterating and improving your pitch.

• Figma: For integrating visuals and UX mockups if applicable.

• Canva or Pitch: For building supplemental one-pagers.

Best Practices for Writing an Investment Memo

• Be concise and data-driven: Investors have short attention spans.

• Lead with insight: Why does your company exist now?

• Tell a story: Make your memo as engaging as your pitch deck.

• Proofread: Typos show sloppiness.

Common Mistakes to Avoid

• Overloading with jargon

• Ignoring competition

• Being too vague on financials or usage of funds

• Skipping the risks section

Conclusion

An investment memo is not just paperwork, it’s your startup story, data, and future rolled into one powerful document. If you’re serious about fundraising, this should be one of your first steps. It forces discipline, strengthens communication, and increases your odds of making the right impression on investors.

Start Smart with Plox

Once your memo is ready, securely share it using Plox. Plox not only lets you share the memo with complete control but also tracks how long investors spend on each section. Get real-time visibility into interest levels, and optimize accordingly.