How learning to write an investor memo taught me the importance of “wearing different hats”
You might’ve heard the phrase “wearing different hats” or some variation of it, BBC even has it listed in their language archives. Essentially, it means to have several different jobs/roles. At each point in time our roles are bound to change whether we are cognizant of it or not. Just think back to a time you learned something and managed to teach it to someone else.
And here’s where everyone realizes they wear different hats every single day. Whether it’s ourselves or those around us, everyone cycles through the many hats in their “wardrobe.” Just as the hats represent different roles, our “wardrobe” represents all the roles we have access to. Now sticking with the wardrobe analogy, having a larger wardrobe would mean greater versatility because you’ve got more options to choose from. Of course, this also means that the hats in our wardrobe must also improve if we want to maintain a high quality wardrobe.
What does all this mean in the real world? It means constantly honing our skills in various roles so that we’re prepared for anything that comes our way. I’m sure you’ve seen the famous Warren Buffett quote floating around:
“The best investment you can make is in yourself…The more you learn, the more you’ll earn.”
So, how does any of this tie into learning how to write an investor memo? In layman’s terms, an investor memo essentially addresses why a company is a good investment opportunity to potential investors. There are many resources out there outlining how to write an investor memo, but none of them address the importance of learning how to write one. At Tess Schools, I first approached the investor memo by putting my VC hat on. While there are many different styles of writing an investor memo, they all aim to answer the same question: Why should I invest in this opportunity?
Simple enough right? Not quite, from a VC standpoint, an investor memo is usually done by an analyst or associate at the firm then presented by anybody at the partner level. Why is this important? The secret to any good investor memo is presenting compelling information about the company that convinces the investor that this is a good opportunity. In other words, understanding the success model of good startups is ultimately what helps VCs discover unicorns.
On the other hand, understanding the purpose of an investor memo from an entrepreneur’s perspective is equally important. Why? If founders are able to grasp what VCs are looking for, they’re more likely to secure funding from potential investors. Moreover, it gives you a chance to analyze your company in regards to product, risks, competitors, etc.
Are you starting to see how it’s all very much connected? It doesn’t just stop there, after learning how to write an investor memo, I was later tasked with instructing others. Once again, I switched hats from mentee to mentor. It wasn’t easy, but learning how my mentors taught me definitely helped.
Do you see value in wearing different hats now? Whether you think you’ll end up as an entrepreneur/VC or any other job, understanding the importance of wearing multiple hats will pay dividends in your life.
