The Investment Strategy Memo

An investment strategy memo is a crucial document that bridges the gap between your pitch and a VC's investment decision. This is literally one of the most important documents you can create in your investor pack. When crafted effectively, an investment strategy memo becomes the blueprint for the VC's internal investment thesis – the document they use to justify the investment to their partners and limited partners.

What Is an Investment Strategy Memo?

It's a comprehensive (usually 20-30 pages) document that presents a detailed, cohesive case for your company, covering all the standard elements (problem, solution, traction, market, competition, team, financials, etc.) but with substantially greater depth than a pitch deck.

Strategic Purpose in the VC Process

• From Interest to Decision: Whilst your pitch aims to move VCs from interest to enthusiasm, the strategy memo enables them to progress from enthusiasm to an actual investment decision.

• Mirror to Internal VC Documents: Your investment strategy memo should mirror the internal investment recommendation memo that partners draft and circulate within their firm. Looking at examples from Bessemer Venture Partners' investment memos for companies like Shopify, Twilio, and Pinterest provides excellent templates to follow. Though there's no single format, these serve as valuable guides.

• Supports a Thesis-Driven Investment Approach: Most deep-tech investors follow thesis-driven strategies, investing in startups that fit within defined areas of emerging technology. A well-crafted memo helps position your startup within the broader industry trends, competitive landscape, and investment thesis of the VC.

• Due Diligence Acceleration: A well-crafted memo significantly speeds up and streamlines the due diligence process by providing investors with comprehensive information upfront.

• Information Fidelity: It ensures maximum accuracy as information is shared across the VC partnership, preventing misinterpretation of your value proposition.

• Narrative Control: The memo shapes how your company's story is told and how partners evaluate the opportunity, allowing you to frame discussions on your terms.

Deep-Tech Investment Strategy Memos

Investment strategy memos are vital for deep-tech startups due to their unique characteristics: complexity, technical depth, and long commercialisation timelines. Unlike traditional startups, deep-tech ventures typically require significant upfront investment, rely on breakthrough scientific innovations, and operate in niche or emerging markets.

Key Benefits:

1. Simplifies Complexity for Investors • Translates highly technical innovations (AI, quantum computing, biotech, advanced materials) into clear business opportunities • Bridges knowledge gaps for VC partners who may lack specialized technical expertise

2. Aligns Investors on Risk and Timeline • Establishes realistic expectations regarding longer R&D cycles, higher capital requirements, and uncertain regulatory pathways • Clarifies time-to-market, key milestones, and risk-adjusted return potential

Critical Focus Areas for Deep-Tech Memos:

• Technical Differentiation – Unique and defensible aspects of the technology

• Commercialisation Path – Strategy for moving from lab to market

• Regulatory & Compliance Risks – Potential barriers to approval or adoption

• Capital & Infrastructure Needs – Funding requirements for scale-up and deployment

Investment Strategy Memo: Best Practices

Your investment strategy memo should mirror the internal investment recommendation memo that VC partners draft and circulate within their firm. Bessemer Venture Partners provides excellent examples of actual investment memos for companies like Shopify, Twilio, and Pinterest at https://www.bvp.com/memos.

Objective Tone is Critical: The more objectively written your memo is, the more credible it becomes, and the more likely partners will cite it verbatim in their internal communications. Avoid excessive hype or marketing language in favor of balanced, evidence-based statements.