The strategist's deal memo

As a strategist working mostly on marketing challenges, I've always liked to draw inspiration from other fields to improve my own toolbox. In the past 5 years, most o the projects I've worked on were a consequence of companies being challenged online and wanting to be online leaders.

Venture Capital firms have been thinking about original and profitable ways of growing online companies for over 20 years and I've liked to read how they structure their thinking about new investments.

As an example, this is the open source deal memo template from Point Nine capital. 

The deal memo is a document we start to fill in whenever we take a closer look at a company. Its main purposes is to make it easy for the rest of the team to get up-to-speed with what the company is and to identify key points which have not been covered yet. We write the deal memo ourselves by collecting all the information we could get from the deck, conversations with the founders (email, meetings, calls), and also our personal research. (source)
 ( source )

If you compare that kind of deal memo to the briefs or whatever tool most communication-brand-marketing-or-even-business strategists use, you realize that some key elements Venture Capital firms think are essential to the success of a new online business are not part of most strategists reflexions. 

Product, market, and competition feel familiar. We're good.

Traction and acquisition are often overlooked because you don't have access to these metrics or people don't really understand where their customers are coming from. It's blurry.

The team is usually absent from a strategist's considerations. Who will execute the plan and what are their strengths and weaknesses?

Funding could be translated to a company's capacity to invest in growth. This is a relevant question: « How much cash is left in the bank and how much time it will last? ». 

Reference calls are quick 15mn calls with customers or industry expert. Not a research mandate by an external firm or interns. Not a fact pact. Just quick chats with people who are familiar with the product and can provide additional info.

The business model is the current pricing and how it compares to similar products.

Obviously, this exercise is a stretch. I don't think strategists should use VC deal memos as is.

  1. I do think most consultants are missing important info when they assess a mandate and that comparing with what VCs are looking at is a good reminder of the business's fundamentals.
  2. I do think there's value in using a standardized format like the deal memo to be able to compare projects over time. So I'll try to develop a strategist's deal memo in the future.