Generate Investment Memo for Portfolio Company

Goal

Context

• Enthusiasm for frontier technology and macro tailwinds
• Skepticism about execution risks and market uncertainties
• Specificity over generalization (exact metrics, named investors, dated milestones)

Required Inputs

Company Fundamentals

• Company name, stage, headquarters location
• Founding team backgrounds (prior companies, exits, relevant experience)
• Origin story (lab spinout, second-time founders, strategic pivot)
• Current status (prototype, pilot, commercial, etc.)

Market Intelligence

• Total Addressable Market (TAM) with sources
• Market growth drivers (technological, regulatory, economic)
• Current market size and projected growth (with timeframes)
• Target customer segments and use cases
• Competitive landscape and alternative approaches

Technology & Product

• Core technology description (what it does, how it works)
• Key differentiators vs. alternatives
• Development stage (prototype, validated, production-ready)
• Technical risk factors and mitigation strategies
• IP position (patents filed/granted, FTO analysis)

Traction Metrics

• Revenue (ARR, bookings, pilots)
• Letters of Intent (LOIs) - with caveats about non-binding nature
• Customer pipeline (named if possible, anonymized if sensitive)
• Technical milestones achieved
• Regulatory progress (if applicable)
• Partnership announcements

Team Assessment

• CEO/Co-Founders: prior exits, relevant domain expertise
• Key executives: previous companies, specialized skills
• Board composition and advisor network
• Team gaps and hiring roadmap

Deal Specifics

• Round type (Seed, Series A, Series B, etc.)
• Round size and pre-money valuation
• Lead investor(s) and key participants
• Hypernova allocation target
• Use of proceeds (specific, prioritized)
• Deal timeline and closing date

Risk Analysis

• Technology risks (validation, scale-up, dependencies)
• Market risks (adoption cycles, competitive response)
• Regulatory risks (licensing, permitting, export controls)
• Execution risks (capital intensity, team gaps)
• For each risk: concrete mitigation strategies

Strategic Context

• Alignment with Hypernova thesis
• Exit scenarios (strategic acquirers, public markets, timeframe)
• Key value inflection points (licensing, pilots, partnerships)

Structural Template

Header Block

[Stage] Opportunity Brief
Date: [Month Day, Year]
by Michael Staton & Tugce Ergul

[Company Name] Investment Memo

1. Executive Summary

• Opening statement: One-sentence value proposition
• Stage & Status: Current funding round and traction
• Focus: Core technology/market category
• HQ: Location
• Use of Proceeds: Specific allocations

2. Business Overview

• Company mission and approach
• Target market(s) - prioritized
• Key differentiators (3-5 bullet points)
• Business model (hardware sales, SaaS, licensing, service contracts)
• Early commercial traction

3. Market Context & Macro Drivers

• Market size metrics (current and projected, with sources)
• Growth drivers (3-5 bullets, each with specific evidence)
• Regulatory/policy tailwinds (if applicable)
• Target customer economics and pain points

4. Technology & Product

• Product description (features, capabilities, form factor)
• Technical architecture (high-level, non-jargon)
• Development lineage (lab origins, key innovations)
• Current status (prototype, pilot, production)
• Competitive advantages

5. Traction & Investors

• Previous funding rounds (amounts, leads, dates)
• Select investor highlights (with portfolio examples)
• Commercial traction (LOIs, pilots, revenue)
• Notable partnerships or validations

6. Team

• CEO & Co-Founders (backgrounds, prior exits)
• Key executives (C-suite, VP-level with relevant expertise)
• Board and advisors (if notable)
• Team narrative: Why this team can execute

7. Deal Terms

• Round type and status
• Lead investor(s)
• Strategic investors
• Use of funds (prioritized bullets)

8. Risks

1. Risk category: Specific concern
   • Mitigation: Concrete mitigation strategy

9. Strategic Fit & Exit Scenarios

• Alignment with Hypernova thesis
• Potential strategic acquirers (with rationale)
• Public market pathway and timeline
• Key value drivers to monitor

10. Conclusion

• 2-3 sentence summary of investment case
• Emphasis on convergence of technology, timing, and team
• Forward-looking statement on company's positioning

Style Guide

Voice & Tone

• Analytical, not promotional: Present evidence, acknowledge uncertainties
• Balanced: Highlight strengths AND risks with equal rigor
• Specific: Use exact numbers, named entities, dates
• Confident but measured: Avoid superlatives ("revolutionary," "game-changing")

Formatting Preferences

• Bullets over paragraphs: Maximize scannability
• High information density: Every sentence should add new information
• Acronyms: Spell out on first use, then abbreviate consistently
• Sources cited: Especially for market sizing ("WEF/McKinsey project...")
• Dates included: For all milestones, projections, and commitments

Good vs. Bad Examples

Market Sizing

Risk Assessment

• Mitigation: Stage-gated contracts and pilot-to-production paths."

Team Description

Traction Metrics

Prompt Template for AI Model

You are an investment analyst at Hypernova, a venture capital firm focused on frontier technology that enables the next industrial infrastructure cycle. You are writing an opportunity brief for [Company Name]'s [Stage] round.

CONTEXT DOCUMENTS:
1. Review the attached reference memos (Aalo Atomics, Star Catcher) for structural template and voice
2. Match the analytical tone: balanced, specific, investor-focused (not promotional)
3. Follow the exact section structure provided in the template

RAW COMPANY DATA:
[Paste organized inputs from the Required Inputs checklist]

TASK:
Generate a complete investment memo following the structural template and style guide.

SPECIFIC EMPHASIS FOR THIS DEAL:
[Customize based on deal-specific priorities, e.g.:]
- Regulatory pathway is critical - deep dive on NRC licensing timeline
- Technical validation risk - need detailed mitigation in Risks section
- Market timing is key driver - emphasize macro tailwinds in Market Context

CONSTRAINTS:
- Include 4-6 specific risks, each with concrete mitigations
- All market sizing must include sources or caveats
- Maintain analytical balance (acknowledge execution challenges)
- Use bullet format for scannability (minimize paragraph blocks)
- Match information density of reference memos
- Acronyms spelled out on first use

OUTPUT REQUIREMENTS:
- Complete memo following all 10 sections
- 4-6 page target length (equivalent to reference memos)
- Ready for review by Michael Staton & Tugce Ergul

Iterative Refinement Workflow

Pass 1: Structural Completeness

Pass 2: Specificity Audit

Pass 3: Risk Rigor

Pass 4: Voice Consistency

Pass 5: Source Validation

Validation Checklist

• Follows exact 10-section structure
• Includes specific metrics throughout (not vague "strong growth") along with citations.
• Risk section has 4-6 items, each with mitigation
• All acronyms spelled out on first use
• Market sizing includes sources or caveats along with citations.
• Team section includes prior companies/exits, including citations and or links.
• Deal terms section is complete and accurate, if Deal terms provided.
• Deal terms section follows template, if Deal terms not provided.
• Maintains analytical tone (not promotional)
• Information density matches reference memos
• Clear investment recommendation in Conclusion
• No unsupported superlatives or generalizations
• Dates included for milestones and projections

Edge Cases & Special Scenarios

Earlier Stage (Seed/Pre-Seed)

• Emphasize team backgrounds and technical validation over traction
• Market sizing can be broader, but acknowledge uncertainty
• Risks section should include "market validation" as primary concern

Later Stage (Series B+)

• Require revenue metrics and customer names (if not confidential)
• Deeper competitive analysis
• More detailed unit economics
• Clearer path to profitability or exit

Deep Tech / Regulated Markets

• Add dedicated "Regulatory Pathway" subsection under Technology & Product
• Expand risk mitigation on technical validation and approval timelines
• Include government partnerships or non-dilutive funding (SBIR, grants)

International Companies

• Note regulatory environment differences (EU vs. US)
• Address currency and cross-border considerations
• Identify strategic rationale for Hypernova geography

Related Files

Reference Memos

• /Users/mpstaton/content-md/lossless/client-content/Hypernova/Files/Investment_Memo_Aalo_Atomics_SeriesB.pdf
• /Users/mpstaton/content-md/lossless/client-content/Hypernova/Files/Starcatcher Investment Memo.pdf

Potential Supporting Documents (to be created if needed)

• Master-Investment-Memo-Template.md - Fillable template with field descriptions
• Hypernova-Voice-and-Style-Guide.md - Expanded good/bad examples
• Investment-Memo-Input-Checklist.md - Data gathering worksheet
• Validation-Criteria.md - Quality review rubric

Usage Notes

• Garbage in, garbage out: The quality of the generated memo depends entirely on the quality and completeness of the input data. Do not skip the Required Inputs checklist.
• AI as draft, not final: Always expect to iterate 3-5 times to match Hypernova voice and rigor.
• Human judgment required: AI cannot assess deal quality, only format the analysis. Investment thesis, risk assessment, and recommendation require human expertise.
• Update reference library: As new high-quality memos are written, add them to the reference set to improve AI training.
• Maintain consistency: Use the same structural template across all deals to enable comparative analysis.