Investment Committee

In depth

The investment committee is where a deal becomes real. After sourcing and diligence, the sponsoring partner produces a memo and presents to a defined set of partners. The format ranges from a single 60-minute discussion at a small seed fund to a series of pre-IC, IC, and post-IC sessions at a multi-billion-dollar growth firm. The mechanics matter less than the underlying purpose: force the firm to articulate a single thesis, surface dissenting views, and produce a vote of record before capital moves.

Voting rules signal a firm's risk culture. Unanimous-vote partnerships kill more deals to friction, which protects against weak picks but can also miss contrarian winners. Simple-majority firms move faster and place more bets but rely on the chair to enforce thesis discipline. Larger funds increasingly use staged IC: a screen committee filters early, then a full IC handles the final yes.

Why it matters

For LPs, IC discipline is a proxy for fund governance. A fund that documents IC memos, records votes, and writes post-mortems on misses is one that learns. For founders, knowing a firm's IC structure changes how to manage the process: if unanimous consent is required, the worst partner in the room becomes the gating partner, and the sponsoring partner needs to address that partner's specific concern in diligence before the meeting.

Worked example

A stylized IC memo recommendation for a Series A:

Company: Acme HealthOps
Sponsoring partner: J. Patel
Round: $12M Series A at $38M pre-money, $50M post
Proposed check: $6M lead, full pro rata at next round

The IC debates customer concentration for forty minutes. Two partners want a covenant requiring diversification by Series B. The committee approves the deal 4-1 with the covenant added to the term sheet, and the dissenting partner files a one-paragraph dissent in the memo record. Twelve months later, when the company misses the covenant, the dissent serves as the basis for a sharper conversation about whether to lead the Series B.