The one-page memo

Part 18 of 21 in A Guide for the First-Time Indian Angel Investor← Part 17Part 19 →

This chapter is about creating a one-page memo before making any investment as an angel investor. It helps first-time Indian angel investors clarify their reasons for investing and document key details.

If it does not fit on a page, you do not yet know why you are wiring. Use this before every cheque, including follow-ons.

Write this in your own words. A memo copied from the deck is not a memo. Keep the page with the pass log. When the company dies, read it again. That reread is the only tuition the cheque is guaranteed to buy.

The page

• Company, founder, city, date, and who introduced it. If you cannot name the introducer’s incentive, write “unknown.”
• The motive: momentum, value, or alternative. One of the three. If it is status, stop.
• What the company does, in two sentences a customer would recognise. No adjectives from the pitch.
• Who pays, how much, and whether you have spoken to one of them.
• Cheque, instrument, pre-money or cap, your ownership after the pool, and where you sit in the preference queue.
• Fees and carry, in rupees, not in percentages alone.
• The next round’s likely buyer, and what must be true in eighteen months for that buyer to care.
• Follow-on rule: the new fact that would earn more money, and the fact that would end it.
• Sleep test: if this goes to zero, what changes at home? If the answer is not “nothing,” cut the cheque or do not send it.
• The kill criterion, written now: governance break, runway lie, or a thesis that the MIS has falsified.

A yes is allowed to be short. It is not allowed to be verbal. The syndicates that rush Friday closings are auditing whether you have this page. Do not let them be the only adults in the transaction.