1. Investment Recommendations
Purpose
Content
Structure

2. Agenda Diligence B discussion Investment Recommendations Goals Content
Structure
Backup
Presentation

3. Goals of the Recommendation
To overview – Present a clear picture of the company, product and opportunity
To persuade – why do or not do the deal?
To inform –
What info is needed to decide?
Present the diligence results in a manner that supports the recommendation
To provide for further inquiry – what is missing?
To plan the future – what happens next?

4. Content
Company, product, market, customer, competition, competitive advantage, management, finances
Investment
How much, terms, who else
Facts (diligence): Verified, discovered, calculated
Market
Competition
Comparables
Valuation
Issues raised by diligence, not addressed in plan
What did you pay attention to?

5. Content (Cont.) Unknowns, Risks, Uncertainties
What don’t we know
What don’t we know that we don’t know
Recommendation – yes, no, with conditions
Basis for the recommendation
Markets – size, growth rate, key features
Competition – direct and indirect, key features, strength and weaknesses
Comparables – business model, financials, valuation
Valuation – how much? Exit and when?

6. Structure Overview Issues Explored Facts Repeat “2.” and “3.”
Issues, Risks, Uncertainties
Recommendation

7. Backup Diligence Memos Supporting Documentation
Reports
Articles
Collected data
Make sure it is relevant

8. Presentation Goals Repeat the same in ten slides or less
Overview, issues, facts, unknowns, recommendation
Highlight the “killer” points
Does it matter
Make it black & white
Have backup ready
Make the recommendation clear
It’s a binary call…
Or is it?
When is the right answer, no answer?
When is collecting more data the right answer?
Make it short
Make sure it includes what happens next

9. Key Points Are you clear, concise, accurate?
Does your diligence support your recommendation?
Does your reasoning support your recommendation?
Does the backup material matter?
Is your recommendation clear?

10. Grading Did you meet the Recommendation Goals (Slide 3)?
Did you present the appropriate Content (Slides 4 and 5)?
Did you meet the Presentation Goals (Slide 8)?
Did you meet the Key Points (Slide 9)?

11. Schedule – remainder of classes
See word doc…

12. Next Week Homework Draft presentations Draft recommendation
Question card D (CEO)
Draft presentations