Most angels can talk through a deal fluently. Ask the same angel to write down, in a page, why this company, at this price, with this team, and the fluency often disappears. That gap is what an investment memo exists to close: a short written record of the thesis, the evidence, the risks and the decision, made before any money moves.
This piece sets out the structure experienced angels use, the pre-mortem that gives the document its bite, and the habits that keep the exercise honest. None of it needs a template subscription. A blank page does the job.
A memo written after the decision is a receipt. Written before, it's a test.
The Carry's position is that the memo is the cheapest discipline upgrade available to a working angel: one page written before the wire beats any tool bought after it.
What is an angel investment memo?
An investment memo is a short document, usually a page or two, in which you write down why you're making a particular investment before you make it: the thesis, the evidence for it, the price, the risks, and what would have to change for you to walk away. It's a decision record, not a pitch. The only reader who matters is you, a few years from now.
The discipline pays because writing is a harsher test than talking. A deal can sound coherent across a table and fall apart on paper, where every hedge and every gap shows. That's the write-down test: a thesis that won't compress into a page isn't yet a thesis, it's enthusiasm. Funds write memos because their partners demand them. An angel answers to nobody, which is why the habit does more work here, and why so few bother.
It's also close to free. Most of what separates good angel results from poor ones is behaviour rather than access, the argument made in the discipline gap, and a memo costs an hour and a blank page.
What goes in an investment memo?
Seven sections cover it: the thesis in one line, the problem and the market, the team, the evidence, the deal and the price, the risks with a pre-mortem, and the decision with its conditions. The table above pairs each section with the question it exists to answer.
The one-line thesis goes first and earns its place. One sentence, roughly of the shape: this team wins this market because of this, and the prize is big enough to matter. If the sentence needs three clauses of qualification, that's information too. Problem and market asks whether anyone pays to fix the problem, in numbers you can defend rather than the deck's. Team asks why these founders for this problem, a different question from whether you like them. Evidence separates what has actually happened, revenue, usage, signed contracts, from what is projected. The deal section records the terms and what the price assumes about the outcome; a memo that skips the price isn't finished.
What the memo doesn't do is the checking itself. Reference calls, the cap table, the burn, the SEIS/EIS position: that work belongs to the due diligence checklist. The memo is where you record what the answers add up to.
What is a pre-mortem, and why does it carry the memo?
A pre-mortem assumes the company has failed, some years out, and asks what killed it. Written into the memo before you commit, it drags the specific failure modes into the open while you can still weigh them calmly, instead of after the wire has turned you into a defender of the position.
Generic risk lists don't do this. Every startup carries market risk and execution risk; typing those words changes nothing. The pre-mortem works because it demands specifics: the churn that says the product is a nice-to-have, the co-founder equity split that cracks under pressure, the incumbent that decides the niche is worth taking, the bridge round that quietly reprices everyone. For each cause of death, note the early evidence that would tell you it's underway. Then the hardest line of the whole document: what would genuinely change your mind.
Done properly, this section writes your remaining founder questions for you. The ones that survive contact with the deck are the ones to ask in the last conversation before you decide, and how a founder handles a serious question is itself evidence.
How do you keep a memo honest?
By writing it before the decision, not after. A memo drafted once you've already said yes is a receipt, not a record; it will justify the call rather than test it. Date the document, leave the doubts in, and resist the urge to tidy it once the round closes.
The record then starts paying. At follow-on time, the memo tells you what you believed and lets you compare it with what happened, which is the closest thing an angel gets to coaching. Over ten or fifteen deals the folder becomes a private base rate: which of your theses hold, which risks you consistently underweight, whether your conviction at the time correlated with anything.
The evidence on process, thin as it is, points one way. In the Wiltbank/Kauffman diligence data, the deals that got the least checking returned roughly 1.1 times the money invested. A memo doesn't add hours of diligence by itself. It does make missing work impossible to ignore, because the evidence section sits there, empty, asking to be filled.
How do you start writing memos?
With the next deck that reaches you, including the ones you'd never take. Write the page as though you had to decide by Friday, file it, and pass. Memos on passes are cheap tuition: eighteen months later you can mark them against what actually happened without having paid for the lesson.
Format matters far less than habit. A plain document with the seven headings does the job; some angels keep one running file, others a page per deal. What counts is that the page exists before the money moves and stays unedited afterwards.
A closing note on what this is. A memo is a thinking tool, and this article is general information about building one, not financial advice; it takes no view on any company, round or scheme. Angel investing is high risk and illiquid, and most early-stage companies fail. Check the current rules on the venture capital schemes at GOV.UK and take advice from an FCA-regulated adviser before committing capital, memo or no memo.
Frequently asked questions
What goes in an angel investment memo?
Seven sections cover most memos: the thesis in one line, the problem and the market, the team, the evidence and traction, the deal terms and the price, the risks with a pre-mortem, and the decision with any conditions attached. The aim is a self-contained record of why you made the call, written before the money moved, that you can reread honestly when the follow-on round arrives.
How long should an investment memo be?
One to two pages for a typical angel cheque. The constraint is the point: a thesis that will not compress into a page is usually not yet clear enough to act on. Funds write longer memos because committees and compliance demand them; an angel writing for their future self rarely needs more than two pages, and a longer document mostly hides the gaps a short one would expose.
When should you write the memo?
Before you commit, and ideally before the final conversation with the founders, so the open questions it surfaces can still be asked. A memo written after the decision tends to justify it rather than test it. Date the document, leave the doubts in, and keep it unedited so you can compare what you believed with what happened.
What is a pre-mortem in investing?
A pre-mortem assumes the investment has already failed and asks what killed it. Instead of listing generic risks, you write down the most likely specific causes of death for this particular company, the early evidence that would show each one underway, and what would genuinely change your mind. It is the section of a memo most likely to alter the decision, which is its job.
Is this article financial advice?
No. A memo is a private thinking tool, and this article is general information about how to build one, not financial advice. No memo structure takes a view on whether any particular investment suits you. Angel investing is high risk and illiquid, and most early-stage companies fail. Check the current rules on the venture capital schemes at GOV.UK and take advice from an FCA-regulated adviser before committing capital.