Investment Committee Memos¶

Creating Compelling IC Presentations¶

The Investment Committee (IC) memo is the most critical document in the investment process. It synthesizes months of analysis into a compelling investment narrative that drives decision-making. Sagacity's IC memo builder transforms complex analysis into clear, persuasive presentations.

Understanding the IC Process¶

Purpose and Importance¶

The IC memo serves multiple critical functions: - Decision Document: Primary basis for investment approval - Risk Documentation: Comprehensive risk assessment - Alignment Tool: Ensures team consensus - Reference Guide: Living document throughout ownership - Legal Record: Due diligence documentation

IC Audience Analysis¶

graph TD
    A[IC Members] --> B[Senior Partners]
    A --> C[Investment Committee]
    A --> D[Risk Committee]
    A --> E[Operating Partners]
    B --> F[Strategic Focus]
    C --> G[Returns Focus]
    D --> H[Risk Focus]
    E --> I[Operational Focus]

IC Memo Structure¶

Executive Summary (2 pages)¶

Investment Snapshot¶

Company: TechCo Industries
Sector: Business Services / Technology
Headquarters: San Francisco, CA
Revenue: $250M (2024E)
EBITDA: $50M (2024E) / 20% margin
Purchase Price: $500M / 10x EBITDA
Equity Investment: $200M / 40%
Target IRR: 25%+
Target Multiple: 3.0x

Investment Thesis¶

1. Market Leader: #2 position in $5B growing market
2. Secular Growth: 15% market CAGR driven by digital transformation
3. Margin Expansion: Path to 30% EBITDA margins
4. Platform Opportunity: 10+ identified add-on targets
5. Clear Exit: Multiple strategic buyers identified

Company Overview (5 pages)¶

Business Description¶

Detailed Business Model - Core products and services - Customer value proposition - Revenue model and pricing - Competitive advantages - Go-to-market strategy

Management Assessment¶

Market Analysis (4 pages)¶

Industry Dynamics¶

Market Analysis Framework:
├── Market Size & Growth
│   ├── TAM: $5B growing 15% CAGR
│   ├── SAM: $2B accessible market
│   └── SOM: $500M (25% share target)
├── Competitive Landscape
│   ├── Fragmented: Top 5 = 40% share
│   ├── Consolidating: 20+ deals last 3 years
│   └── Defensible: High switching costs
└── Growth Drivers
    ├── Digital transformation
    ├── Regulatory requirements
    └── Outsourcing trends

Financial Analysis (6 pages)¶

Historical Performance¶

Projections and Assumptions¶

graph LR
    A[Base Case] --> B[12% Revenue CAGR]
    A --> C[25% EBITDA Margin]
    A --> D[3% Capex]
    B --> E[$400M Exit Revenue]
    C --> F[$100M Exit EBITDA]
    D --> G[85% Cash Conversion]

Valuation (4 pages)¶

Valuation Summary¶

Value Creation Plan (3 pages)¶

100-Day Plan¶

Week 1-2: Governance & Setup
├── Board composition
├── Management alignment
└── Quick wins identification

Week 3-4: Deep Dive Analysis
├── Customer interviews
├── Operational assessment
└── System evaluation

Week 5-8: Strategy Development
├── Growth initiatives
├── Cost optimization
└── Org design

Week 9-12: Execution Launch
├── Initiative kickoff
├── Team mobilization
└── Tracking systems

Week 13-14: Review & Adjust
├── Progress review
├── Plan refinement
└── Communication

Risk Analysis (2 pages)¶

Risk Matrix¶

Exit Strategy (1 page)¶

Exit Options Analysis¶

graph TD
    A[Exit Options] --> B[Strategic Sale]
    A --> C[Financial Buyer]
    A --> D[IPO]
    B --> E[5 Identified Buyers]
    C --> F[Multiple PE Firms]
    D --> G[After $75M EBITDA]

Using Sagacity for IC Memos¶

Automated Content Generation¶

Data Integration¶

• Automatic population from data room
• Financial model integration
• Market data incorporation
• Management interview summaries
• Due diligence findings compilation

AI-Powered Writing¶

Content Generation Features:
├── Executive Summary
│   ├── Investment thesis extraction
│   ├── Key metrics highlighting
│   └── Risk summary generation
├── Market Analysis
│   ├── Industry research synthesis
│   ├── Competitive positioning
│   └── Growth driver identification
└── Financial Analysis
    ├── Historical trend analysis
    ├── Projection narrative
    └── Assumption documentation

Collaboration Features¶

Team Contributions¶

• Assigned sections by expertise
• Real-time collaborative editing
• Comment threading and resolution
• Version control and tracking
• Approval workflows

Quality Control¶

Review Checklist¶

• [ ] All numbers tie to model
• [ ] Consistent messaging throughout
• [ ] Risk mitigation documented
• [ ] Exit strategy clear
• [ ] Value creation specific
• [ ] Assumptions documented
• [ ] Sources cited
• [ ] Legal review complete

Best Practices¶

Writing Excellence¶

Clarity and Conciseness¶

• Lead with conclusions
• Use bullet points effectively
• Include visual elements
• Avoid jargon
• Be specific, not general

Persuasive Narrative¶

1. Hook: Compelling opportunity
2. Context: Market dynamics
3. Solution: Our approach
4. Evidence: Supporting data
5. Call to Action: Clear recommendation

Common Pitfalls¶

To Avoid¶

• ❌ Burying the lead
• ❌ Inconsistent data
• ❌ Overlooking risks
• ❌ Vague value creation
• ❌ Missing competition
• ❌ Unrealistic projections
• ❌ Poor formatting
• ❌ Length over substance

IC Presentation¶

Presentation Structure¶

45-Minute Format¶

• 5 min: Executive summary
• 10 min: Company overview
• 10 min: Financial analysis
• 10 min: Value creation
• 5 min: Risk discussion
• 5 min: Q&A setup

Q&A Preparation¶

Anticipated Questions¶

1. Why this valuation?
2. Key risks and mitigation?
3. Management assessment?
4. Competition concerns?
5. Exit timing and options?
6. Value creation specifics?
7. Downside scenarios?
8. Integration complexity?

Post-IC Process¶

Approval Conditions¶

Typical Conditions¶

• Complete legal documentation
• Finalize debt financing
• Management reference checks
• Environmental assessment
• Insurance review
• Working capital adjustment

Documentation Updates¶

Living Document¶

• Regular updates during ownership
• Actual vs projection tracking
• Value creation progress
• Risk evolution
• Exit planning updates

Conclusion¶

The IC memo is your opportunity to demonstrate thorough analysis and compelling investment logic. Sagacity's tools ensure comprehensive, professional, and persuasive IC materials that drive successful investment decisions.

Next: Learn about Valuation Reports generation.