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Use cases · Investment & Deal

IC memo.
The case, and what would have to be true.

The memo the deal team takes to committee: why this asset, why now, the entry valuation against comparable transactions, the two or three variables that drive the return, and the bear case argued as hard as the bull.

  • The thesisWhy this asset, why now?
  • EntryWhat is it worth on entry?
  • The testWhat would have to be true?
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Runs: “Write an IC memo on buying a UK clinical staffing business: the thesis, the entry multiple against comparable deals and on which EBITDA, what drives the return, and the bull and bear cases.” · No account needed.

The short answer

What is an IC memo?

An IC memo is the document an investment committee decides a deal on: the business and why it is for sale, the thesis, the entry valuation against comparable transactions, the return and what drives it, the bull and the bear case, and the risks, with what would resolve each. At Caspr it is the Thesis, the middle Investment & Deal depth.

Last updated Edited and approved by Joy, Founder & CEO

The anatomy

What goes into an IC memo?

An IC memo leads with the recommendation and builds the case underneath it, so the committee can see in the first two minutes what is being asked and why.

The recommendation, first
Go or no-go, the price range or the amount, and the terms, before any supporting analysis.
The thesis
Why this asset, why now, and where value is created. For an early-stage company, the team and why they will win.
The market
For a buyout, market share and served-market growth. For a venture memo, top-down and bottom-up, with the gap between them explained.
Entry valuation
The entry multiple against comparable transactions and trading comparables, on a stated EBITDA.
What drives the return
The value-creation bridge, from earnings growth, multiple change and debt paydown, and the two or three variables it turns on.
Customers and retention
Concentration framed as a risk to the multiple, and retention cohort by cohort.
Bull and bear, and the risks
Both cases argued with equal rigor, at equal weight, and each risk paired with what would resolve it.

The memo argues the case; it does not test its own claims adversarially or assess the quality of earnings. That is due diligence, at the Investment & Deal Diligence depth.

Every version

Which IC memos can Caspr write?

Most asked

Buyout deal teams

A buyout fund’s investment committee decides go or no-go, and the price range.

An IC memo, or investment committee memo, is the document a private equity fund’s committee decides a deal on: the thesis, entry valuation against comparable deals, what drives the return, both cases argued.

What it answers

  • What does the business do, how does it make money, and why is it for sale now?
  • Why this asset, why now, and where is the value created?
  • What is it worth on entry, against comparable transactions?
  • What two or three variables actually drive the return?
  • What are the bull and bear cases, argued equally, and what would resolve each risk?

What it covers

  • Entry EV/EBITDA against recent comparable transactions
  • IRR and MOIC in the base, upside and downside cases, against the fund’s hurdle
  • Leverage, and whether the structure works in the base case
  • Customer concentration and cohort retention
  • Market share and its trend

Investment & Deal · Thesis · $80

Arrives as PowerPoint · PDF

It may ask for: for example, whether to use the fund’s own hurdle rate or a market-standard one.

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Venture partners

A venture partner or investment committee decides whether to back a team in a market, now, or to underwrite growth.

A VC investment memo is a prose case, recommendation first, for backing a startup: the team, the market and why now at seed; growth efficiency and durability later.

What it answers

  • Who is the team, and why will they win?
  • How big is the market, sized top-down and bottom-up?
  • Why this product, and why now, and what would kill it?
  • At growth stage: is growth efficient or bought, and is revenue durable cohort by cohort?
  • Does gross margin support the price being paid?

What it covers

  • Early-stage: active usage, paying customers and whether adoption is organic
  • Growth-stage: Rule of 40, net revenue retention, burn multiple, CAC payback and gross margin, each against its stage benchmark

Investment & Deal · Thesis · $80

Arrives as PDF

It may ask for: for example, whether the company is at seed or Series A stage, or growth stage, because the content shifts.

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Corporate venture teams

A corporate venture capital committee decides whether to fund a minority stake for strategic or financial value.

A CVC investment memo argues a corporate venture stake on its dual mandate: the financial return, and the strategic value to the parent company, argued in words.

What it answers

  • What is the financial return case for the stake?
  • What is the strategic case for the parent: capability, optionality, a channel or an ecosystem?
  • Which of the two is driving this investment?

What it covers

  • Ownership
  • Valuation
  • Expected return
  • The strategic value, stated in prose because it cannot honestly be put in dollars

Investment & Deal · Thesis · $80

Arrives as PDF · Excel

It may ask for: for example, whether the financial case or the strategic case is the main reason for the stake.

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Pension and endowment staff

A pension or endowment’s trustee committee, often not investment professionals, votes on a specific fund commitment.

An LP commitment memo recommends a specific commitment to a private fund, stating the amount first and placing it inside the plan’s own pacing budget and allocation.

What it answers

  • How much, to which fund, and on what conditions, whether a new commitment or a re-up?
  • What is the rationale, in a handful of points?
  • What are the named risks?
  • How does this change our sub-strategy allocation, and what share of this year’s pacing budget is it?

What it covers

  • Net returns against the policy benchmark and liquid alternatives
  • Whether the fund adds to the existing portfolio
  • The commitment as a share of the sleeve and of the pacing budget

Investment & Deal · Thesis · $80

Arrives as PDF

It may ask for: for example, the plan’s current pacing budget and sub-strategy allocation.

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Allocator committees

A plan’s investment committee decides, in each quarterly or half-year private-markets portfolio review, whether the program is on track and any manager needs attention.

An LP portfolio review tells an investment committee whether its private-markets program is on track: returns over each horizon against benchmarks, and how managers disperse by vintage year.

What it answers

  • What are returns over one, three, five and ten years, against the policy benchmark for each?
  • What is NAV, and how has it moved since the last report?
  • Is the portfolio inside its policy target range by strategy?
  • How do managers disperse by vintage year, not as one blended IRR?

What it covers

  • Time-weighted returns by horizon against the policy benchmark and a public-market equivalent (PME)
  • NAV against its target and tolerance band
  • Net IRR by vintage year, first quartile to third

Investment & Deal · Thesis · $80

Arrives as PDF · CSV · Excel

It may ask for: for example, the plan’s current manager roster and vintage-year commitments.

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Not listed?

Describe your own version, and Caspr shows you the report it would build before anything runs.

No account needed.

Where the analysis earns its keep

Where do IC memos go wrong?

The market size
The section the committee challenges hardest. The published estimates are set against each other, and the memo uses the figure that fits the deal and says why.
The denominator
The entry multiple states which EBITDA it is on: reported or adjusted, and for which year.
No invented comparables
Where comparable transactions are thin, the memo says so rather than inventing a multiple.

The question this runs

“Write an IC memo on buying a UK clinical staffing business: the thesis, the entry multiple against comparable deals and on which EBITDA, what drives the return, and the bull and bear cases.”

Run the analysis

Before anything runs, Caspr shows you the report it would build and asks what it needs.

Questions

Questions about IC memos

What it is

What does IC memo mean?

IC stands for investment committee. An IC memo is the document a fund’s investment committee decides a deal on: the business, the thesis, the entry valuation against comparable deals, what drives the return, the bull and bear cases, and the recommendation. The deal team writes it, timed to a scheduled committee meeting.

What is the difference between an IC memo and an investment memo?

Mostly the reader’s word. Buyout funds say IC memo and often present it as a deck. Venture funds say investment memo and write it as prose, recommendation first, at every stage. The substance is the same: a recommendation and the case under it.

Is there an IC memo template?

There is no single one, because format varies by firm. A buyout memo is usually a deck; a venture memo is a prose document. Caspr does not hand you a blank template. It writes the memo, in the format your committee reads, with the components listed on this page.

How to do it

How do I size a market for an IC memo?

For a buyout, as market share and served-market growth rather than a top-down funnel. For a venture memo, top-down and bottom-up, with the gap between the two explained. Caspr builds it the way the committee expects.

How do I triangulate market size from conflicting sources for an IC memo?

Caspr goes underneath each estimate: what was counted, when, and for whom. It separates a difference of definition from a real disagreement, and states which figure to use for the deal, and why.

How do I defend a market size estimate when the IC challenges it?

With the argument already in the memo: the figure, the basis it was chosen on, and why the others were set aside. The market section is the one a committee pushes on hardest, so the answer is there before the question is asked.

How do I give the investment committee a preliminary market view in 48 hours?

Run a Screen for the market view, then a Thesis for the case.

Using AI for it

Can I use AI-generated market analysis in an IC memo?

Yes. Every figure carries its source, and every report is marked as generated by Caspr. The memo informs the committee’s decision; it does not make it.

Cost

How much does an IC memo cost to produce?

An IC memo is written by the deal team itself, so there is no market price to compare. The cost is the team’s time, timed to the committee meeting. We found no published price for an outsourced one. Caspr’s depth and price for each version are on its card above.

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