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Investment Recommendations

This document provides a structured guide for creating thorough investment recommendations. It covers the purpose, content, structure, and agenda of a robust recommendation. Key components include goals, diligence, content, backup, and presentation strategies to ensure clarity and persuasive insights. The format emphasizes company analysis, market research, competition evaluation, financial considerations, and risk assessment to drive informed decision-making. It also highlights the importance of concise, well-supported recommendations and effective presentation techniques.

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Investment Recommendations

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Presentation Transcript

  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 recommendation • Draft presentation • Question card D (CEO) • Draft presentations

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