Why I Used a Memo to Raise our $20M Series A
When we raised our $20M Series A for Rupa last year, we used an investment memo rather than a pitch deck.
Our fundraising process ended up moving along super fast — we went from initial conversations to term sheets ~2 weeks. While I don’t think this is entirely due to using a memo, the format definitely helped us tell our story more clearly, share key details, & cover a lot more ground upfront than a deck.
Since then, I’ve had a lot of friends ask whether they should use a deck or a memo when fundraising.
My takeaway: one is not better than the other. They’re different tools that can / should be used in different scenarios.
Some quick thoughts:
Memo vs. deck: complexity matters.
If you need to explain 1 key concept —> use a deck. If you need to explain more than 1 key concept —> use a memo.
For Example, we’re building in a brand new industry —> to understand Rupa, you first have to understand what this brand new industry is + all the macro changes that are coinciding to spark this shift. THEN once you understand the new industry shift, you have to understand the problem that exists today and only THEN can you understand Rupa. It’s a lot to take in with a deck.
When the market / problem is not easily understood — I suggest a memo. When the market / problem is obvious or easy to grasp, and you’re primarily educating on the solution — a deck can work. Generally you want to have one slide on market / problem in a deck. If you can’t fit it into one slide or are losing people on that slide — I’d opt for a memo. The narrative format of a memo REALLY helped us.
Memos do the hard work for investors.
All investors need to write internal deal memos if they want to invest in your company — creating your own memo for them simplifies a LOT of that work for them (give them something to say yes to + take work off their plate = winning combo!)
Memos are dynamic.
We used dropbox paper for our memo. (This is also what we use for our investor updates.) It allows us to link to a bunch of references that people can click into if they are interested. This makes it a dynamic resource for investors so they can “choose their own adventure” and go down rabbit holes if they want to learn more. I even embedded a video of myself walking through an onboarding call we do with our new teammates. We put in lots of graphs / photos / screenshots as well. The downside with Dropbox Paper is you need to create a new copy for each firm you send it to.
You still need a deck.
We used a deck for partner meetings (but this was purely for storytelling & commanding presence in a one to many setting — the memo was sent ahead of time to the partnership).
The deck is valuable for giving people something to look at as you give a narrative in a meeting in a one to many settings. However, as we dove into Q&A in partner meetings, I would pull up and screenshare the memo. We used them in tandem. The memo was a deeper version of the deck. We did not rely on the deck alone.
The memo lives on.
By nature of being a long form content piece, the memo needs a lot less voice over / explanation than a deck. We continue to use our memo for many things:
Onboarding: new teammates have access to the memo and it gives them a good breakdown of the company and where we’re going.
Recruiting: we share the memo with candidates we’re excited about to see if it’s a mutual fit. Many times candidates want to understand why investors are excited about the company and this memo offers a look under the hood (“this is the exact document we used to raise $20M”). We have candidates sign an NDA and then create a version for them where they can comment & leave questions.
Onboarding Exec Search Firms: Helps us get aligned with exec search firms — they can get up to speed on the company quickly with the memo.
BTW — no matter what medium we chose (if we were going to use a deck or a memo), I don’t use it as a focal point in an initial conversation. I focus on building a 1:1 relationship in the first call and this can get obfuscated if I jump into the deck / memo etc. right away. The relationship to the person we’re entering a 10+ year relationship matters the most. The deck / memo is the tool to help investors understand how you think and see the world.