What Is an Investment Thesis? Real Examples & How to Write Your Own

Every successful investor, whether in private equity, venture capital, or public markets, relies on more than gut instinct. At the center of their decision-making process lies a well-structured investment thesis. This document acts as a guiding framework, helping investors evaluate opportunities, reduce risks, and clearly communicate why a specific company, asset, or sector is worth pursuing.

But what exactly is an investment thesis, and why does it matter so much? In this article, we’ll break it down, show you real investment thesis examples, and walk you through a step-by-step guide to writing your own.

What is an Investment Thesis?

At its core, an investment thesis is a clear and concise statement that explains why an investor is choosing to invest in a particular opportunity. It typically outlines the market opportunity, competitive landscape, financial upside, and potential risks.

Think of it as the storyline behind an investment: Why this deal? Why now? Why us?

Quick definitions

Why Having an Investment Thesis Matters

1. Provides Clarity in Decision-Making

An investment thesis forces you to structure your thoughts and assumptions. Instead of relying on gut feeling, you write down why this deal makes sense, supported by market data and financial projections.

2. Improves Communication with Stakeholders

Investors need to justify decisions to partners, clients, or limited partners (LPs). A clear thesis makes it easier to explain the rationale, expected outcomes, and associated risks.

Professional Insight: As Investopedia defines it, “an investment thesis refers to a reasoned argument for a particular investment strategy, backed up by research and analysis.” (Investopedia)

3. Builds Credibility and Trust

A written thesis demonstrates professionalism and diligence. When pitching to LPs or co-investors, having a clear framework shows you’ve done your homework.

4. Creates Consistency Across Investments

By using the same structure for every opportunity, you create a repeatable process. This helps avoid biases and ensures your fund or team evaluates opportunities consistently.

Private Equity Perspective: Carta explains, “An investment thesis clarifies how you’ll make money for your fund’s LPs … [including] stages and industries of those companies.” (Carta)

5. Reduces Risk Through Structured Analysis

By explicitly writing down risks and assumptions, you’re more likely to spot gaps in reasoning. A thesis makes it harder to ignore red flags and easier to compare opportunities objectively.

Key Elements of a Strong Investment Thesis

🔎 Real-World Examples

• Private Equity: Bain Capital has emphasized that a sound investment thesis should be “grounded in both market fundamentals and the firm’s ability to add value.” (Bain Capital Insights)
• Venture Capital: Sequoia Capital’s “RIP Good Times” memo (2008) is a famous case of adapting investment theses to market realities, urging startups and investors to prepare for leaner times. (link to presentation here)
• Growth Equity: Insight Partners explicitly outlines its investment thesis framework on its website, stressing scalable software companies with recurring revenue models. Insight Partners has a published piece “The Insight Way …” where they describe their framework: stage-agnostic investing, prioritizing strong SaaS unit economics, strategic insight + operational expertise, (Insight Partners)

Investment Thesis Examples

Private Equity Example – Bain Capital

Private equity theses often focus on value creation through operational improvements and roll-ups.

In its guidance, Bain stresses that a thesis should “describe a concrete benefit, rather than a vaguely stated strategic value.” (Bain – Writing a Credible Investment Thesis)

Sample Thesis (PE style):

“Acquire a regional healthcare services provider with strong recurring revenues, then expand into adjacent states through a roll-up strategy. Operational improvements and digital transformation will enhance margins, driving a targeted IRR of 20%+ within five years.”

Venture Capital Example – Insight Partners

VC firms focus on scalability and disruptive potential.

Insight Partners outlines that it invests in “software-first, stage-agnostic” companies with recurring revenues and strong SaaS unit economics. (Insight Partners – The Insight Way)

Sample Thesis (VC style):

“Invest in an early-stage SaaS company solving cybersecurity gaps for SMBs, supported by rapid ARR growth and a sticky product. Insight Partners will accelerate growth through its ScaleUp program and GTM frameworks.”

Public Equity Example – International Paper Corp

The Seattle University Redhawk Fund published a full investment thesis on International Paper Corp. Their analysis included valuation modeling, EBITDA multiples, and long-term growth drivers.

Extract:

“We are initiating coverage of International Paper Corp with a BUY rating. Our investment thesis is based on the company’s strong market position in containerboard, expected growth in e-commerce packaging, and undervaluation relative to peers at 8.5x EV/EBITDA.”
(Seattle University RHF Report – PDF)

This shows how public equity theses mix quantitative analysis (multiples, cash flow forecasts) with strategic positioning.

Alternative Asset Example – Fidelity Digital Assets (Bitcoin)

Not all theses are about equities. Fidelity Digital Assets published an investment thesis for Bitcoin as an alternative asset.

Extract:

“Bitcoin is fundamentally a monetary good and may be the primary monetary good of the digital asset ecosystem. We believe it has the potential to act as a store of value, similar to gold, due to its scarcity, durability, portability, and verifiability.”
(Fidelity Digital Assets – PDF)

This shows how the structure of a thesis adapts when applied to digital assets instead of companies.

How to Write Your Own Investment Thesis

Crafting an investment thesis doesn’t have to be intimidating. The key is to combine structured thinking with evidence and a clear narrative. Below is a step-by-step framework you can use to create your own.

Step 1: Define Your Investment Goal

• Actionable: Write down whether your primary objective is growth, income, diversification, or value creation.
• Educational: Private equity funds often define their thesis around sector consolidation (e.g., healthcare roll-ups), while venture capital firms may target scalable SaaS solutions.
• Example: Bain Capital emphasizes identifying “concrete benefits” that link to long-term value creation (Bain).

Step 2: Analyze the Market Opportunity

• Actionable: Research the total addressable market (TAM), customer demand, and long-term trends.
• Educational: A thesis should prove there’s room for growth. For example, Seattle University’s International Paper Corp thesis cited rising demand for e-commerce packaging as a growth driver

Step 3: Assess the Competitive Landscape

• Actionable: List top 3–5 competitors and analyze their market share, moats, and weaknesses.
• Educational: Insight Partners’ framework highlights SaaS unit economics and defensibility as key criteria when evaluating startups

Step 4: Evaluate Risks and Mitigation Strategies

• Actionable: Identify at least 3 risks (market, operational, regulatory) and write mitigation tactics.
• Educational: Fidelity’s Bitcoin investment thesis outlined both potential upside and regulatory risks—showing that acknowledging uncertainty builds credibility (Fidelity Digital Assets PDF).

Step 5: Quantify the Financial Upside

• Actionable: Use metrics such as IRR, ROI, or payback period to project returns.
• Educational: Growth equity firms like Loomis Sayles stress compounding earnings across cycles as the backbone of their thesis (Loomis PDF).

Step 6: Write the Thesis Narrative

• Actionable: Combine your findings into a concise statement (3–5 sentences).
• Educational: Example from SeattleU thesis: “We recommend BUY for International Paper due to strong positioning in containerboard, growth in e-commerce packaging, and undervaluation at 8.5x EV/EBITDA.”

Step 7: Review, Test, and Revise

• Actionable: Share your draft with colleagues or mentors for feedback.
• Educational: HBR notes that top VCs treat their investment theses as “living documents” that evolve with new data (Harvard Business Review).

📊 Investment Thesis Template

Here’s a simple table you can copy into a Google Doc, Notion, or Excel sheet when writing your thesis:

Common Mistakes to Avoid When Writing an Investment Thesis

• Too Broad or Vague Goals: Not defining what kind of returns you want, risk tolerance, or timeframe. Without specificity, it’s hard to measure success or make trade-offs. The CFA Institute, in its “Tips for Avoiding the Top 20 Common Investment Mistakes”, calls out “not having clear investment goals” and “expecting too much or using someone else’s expectations” as key errors.
• Ignoring Competitive Threats & Barriers: Overlooking how fast competitors can adapt or new entrants can disrupt. Failing to assess what moat, if any, the investment has.
• Underestimating Risks & Not Planning Mitigations: Leaving major risk factors implicit or assuming “things will work out.” Not considering regulatory, technological, market, or execution risks.
• Overreliance on Past Performance / Trends: Chasing returns simply because something has done well recently. Extrapolating growth without enough justification.
• Neglecting Financial Projections or Being Over-Optimistic: Using overly optimistic revenue growth or ignoring the downside. Not aligning projections with credible benchmarks or industry comparables.
• Failure to Review & Revise the Thesis: Treating the thesis as static once written. Not updating when market conditions, competitive dynamics, or internal data change.
• Emotional Biases or Hype: Getting swayed by what’s fashionable, media hype, or investor FOMO rather than fundamentals. Letting confirmation bias filter data.

Final Thoughts on Building an Investment Thesis

A well-structured investment thesis is more than a formality—it’s the backbone of smart investing. Whether you’re in private equity, venture capital, public markets, or exploring alternatives like digital assets, a thesis gives you:

• Clarity on why the investment makes sense
• Consistency in how you evaluate opportunities
• Credibility with partners and stakeholders
• Confidence in navigating risks and market shifts

As McKinsey & Company notes in its guide on investment strategy, the best investors “combine quantitative discipline with a clear strategic narrative” to stay ahead in competitive markets (McKinsey).

The takeaway? Writing your own investment thesis forces you to think critically, filter opportunities, and align decisions with your broader goals.

👉 If you’re ready to take the next step, start drafting your thesis today using the framework in Section 5. And if you want to keep sharpening your strategy skills, check out our related guides on business growth strategies and networking tools for professionals.