Practical Investment & Financing Knowledge Base
A practical knowledge base for primary market investment and financing: valuation, clauses, performance targets (VAM), due diligence, fund operations—all written in a way that's ready for direct negotiation.
When to Use
- When raising capital and need to understand exactly what a Term Sheet / SPA / SHA is allocating
- When valuing a project, building financial models, or drafting investment memos
- When preparing due diligence checklists or evaluating whether a project is investable
- When preparing for negotiations on behalf of either the FA or the investor side
What It Provides
- Cross-validated valuation methods: Comparable companies / Comparable transactions / DCF / PS / PE—multiple approaches cross-checked to avoid single-method padding
- Clause-by-clause breakdown: Key clause impacts and red lines in Term Sheets and investment agreements (liquidation preference, anti-dilution, drag-along, exclusivity, repurchase)
- Performance target (VAM) and repurchase design: How to write trigger conditions, compensation mechanisms, and backstop arrangements so risk doesn't fall entirely on the founder
- Due diligence and investment decisions: Six-dimension due diligence framework, investment memo structure and review points
- Fund operations: LP/GP relationships, fund lifecycle, exit paths
- Ready-to-run scripts: Monte Carlo simulations, sensitivity analysis, project scorecards, valuation multiple validation
Knowledge Modules
| Module | File | Content |
|---|---|---|
| Basics & Full Process | references/fundamentals.md | Terminology, process, investment entity map, FA eight-step method, risk quadrants |
| VC/PE Frameworks | references/vc-pe-frameworks.md | Six-dimension due diligence system, investment logic |
| Institutional Methodologies | references/top-tier-frameworks.md | Public investment models and judgment frameworks from top-tier institutions |
| Valuation & Modeling | references/financial-modeling.md, references/financial-statement-quick-analysis.md | Five-step financial model construction, quick financial statement reading |
| Clause Practice | references/vam-practice.md, references/practice-review.md, references/card-2026Q2-clause-dynamics-quick-ref.md | Performance target (VAM) practice, investment agreement review, clause dynamics |
| Negotiation | references/negotiation.md | Clause negotiation red lines and analysis |
| Fund Operations | references/fund-operations.md | PE/VC fund operations guide |
| Financing Advisory Perspective | references/enterprise-financing-advisory.md, references/fa-project-evaluation.md | Corporate financing advisory, FA project evaluation |
| Investment Decision & Due Diligence | references/investment-memo-workflow.md, references/industry-research-methodology.md | Investment memo workflow, industry research methodology |
| Minority Shareholder Protection | references/investor-protection-small-stake-operation.md | Clause protection design for minority shareholding |
| Valuation Multiples & Templates | templates/2026-valuation-multiples-template.md, templates/dd_report_template.md | Valuation multiples reference, due diligence report template |
Three Hard Rules (The Most Valuable Part)
- Valuation must be cross-validated: Using only one method to calculate a number—investors will see it as padding at a glance; use at least two approaches to cross-check and explain the reason for any differences.
- Clauses are more valuable than valuation: A 10% difference in valuation is money, but a poorly written clause can mean loss of control; prioritize negotiating liquidation preference, anti-dilution, drag-along, and repurchase clauses first.
- Performance targets (VAM) must address "trigger + compensation + backstop" in three stages: Negotiating only performance without agreement on compensation mechanisms and repurchase backstop puts all the risk on the founder.
How to Use
- Input: Project details, financing stage, original clause text / term sheet draft, financial data
- Output: Clause interpretation and risk points, negotiation red line checklist, valuation comparison table, due diligence preparation checklist, financial model
Disclaimer
This knowledge base is a compilation of methodologies and practical experience; it does not constitute investment advice or legal opinion. For specific clauses and legal issues, please refer to formal professional opinions.
🙋 About the Author
九品锦锂e ｜ Turning painful lessons into ready-to-use knowledge packs—no textbooks. This is accumulated from real projects I've worked on.
WeChat: ly5419495 (Add with note "SkillHub" for priority approval) WeChat Official Account: 初五Agent (Search on WeChat—project reviews and methods are posted there; you can read without adding me on WeChat)
I also have several other ready-to-run tools on this shelf page (copy and open in browser): https://skillpay.alipay.com/public/jiupinjinlie
If you get stuck while using it, or have other scenarios you'd like me to organize into a knowledge pack, feel free to reach out via any of the above channels.
