Sabaki Guide
How To Write A Deal Memo From Source Material
A practical workflow for turning decks, diligence notes, metrics, and research into a source-backed investment memo.
A source-backed deal memo is an investment memo where each material claim can be traced to a deck, document, metric, interview, or research source. It helps investment teams debate the actual evidence instead of relying on unsupported narrative.
Key Takeaways
- A deal memo should separate the investment case, risks, open questions, and recommendation.
- Source material should stay connected to each material claim.
- AI can accelerate memo drafting when it preserves citations and uncertainty.
How To Draft A Deal Memo From Source Material
- Collect the source setGather the deck, data room files, diligence notes, metrics, market research, references, and prior correspondence.
- Extract the core claimsIdentify the company claim, evidence, risk, and open question behind each memo section.
- Build the investment caseWrite the market, product, traction, team, and return logic with citations.
- Write the risks and mitigantsState what could break the deal and what evidence reduces or increases each risk.
- Close with a recommendationSummarise whether to pass, keep diligencing, or invest, and explain the conditions.
Quick Comparison
| Memo Section | Source Material | Decision Use |
|---|---|---|
| Company snapshot | Deck and company profile | Frames the deal quickly |
| Traction | Metrics, revenue, usage, pipeline | Tests momentum |
| Market | Research, customers, comparables | Tests upside |
| Risks | Diligence gaps and conflicting evidence | Tests downside |
| Recommendation | All cited sections | Supports IC decision |
Frequently Asked Questions
What is a source-backed deal memo?
A source-backed deal memo ties material claims to documents, metrics, interviews, or research. It lets investment teams inspect the evidence behind the recommendation.
What sources should be used for a deal memo?
Common sources include the pitch deck, data room, financial model, KPI exports, customer evidence, market research, diligence notes, and reference calls.
How can AI help write investment memos?
AI can extract claims, organise evidence, draft sections, and identify gaps. It should preserve citations and flag uncertainty so investors can review the evidence directly.
What makes a deal memo decision-ready?
A decision-ready memo presents the investment case, key risks, missing evidence, return logic, and recommendation clearly enough for partners or IC members to challenge.