Wrenfield — Series A at $80M
A 6-hour Venture Investment Memo case study with a complete model answer
Modeled After
Spark Capital
The single-question priced-round prompt Spark Capital is reported to set — would you invest at this valuation, against a stated fund return hurdle — answered as a portrait memo whose valuation page runs the what-you-need-to-believe chain backwards from the hurdle to a required revenue CAGR at every hold period.
Structure and exercise format are modeled after Spark Capital — the single-question prompt and the memo it expects. The company, the financials and every figure in this case are entirely our own.
The Situation
Wrenfield Robotics, Inc. builds autonomous mobile robots for mixed-SKU case picking in large warehouses, and the fleet-orchestration software that decides what each robot does next.
Wrenfield Robotics, Inc.
- Sector
- Warehouse automation — autonomous mobile robots and fleet orchestration software for mixed-SKU case picking, leased as a service
- Size
- Geography
- United States, selling to grocery, food distribution and third-party logistics operators running warehouses above 100,000 square feet
- Ownership
- Situation
The Prompt
You are staffed on a Venture Investment Memo engagement for Wrenfield Robotics, Inc. You have 360 minutes to work through the materials and produce a memo.
Supporting Materials
What you are handed at the start of the case, in the format a real process would use.
The assignment (material-1.pdf)
Term sheet and round mechanics (material-2.pdf)
Company deck extract (material-3.pdf)
Reference and customer call notes (material-4.pdf)
Fleet telemetry and comparable-company extract (data-1.xlsx)
What You Have to Produce
The deliverables, in the order the committee will read them. The exercise runs 360 minutes.
PART 1
The round: settle ownership before anything else
PART 2
Dilution to exit, modeled rather than assumed
PART 3
Reserves: what the position actually costs
PART 4
The preference, and what it is actually worth
PART 5
What you need to believe
PART 6
Size the market from the bottom up
PART 7
Screen the listed comparison set
PART 8
Three operating cases you can defend
PART 9
The price, the hold and the reserve
PART 10
The beliefs, and the diligence that would test them
How to Approach It
The order a strong candidate works in, and why. This is the shape of the answer — the finished memo is in the solution set below.
- 0:00 – 1:15
read everything, and open nothing
- 1:15 – 2:00
settle the ownership and the reserve
- 2:00 – 2:45
run the bar backwards
- 2:45 – 3:30
build the market, screen the set, build the cases
- 3:30 – 6:00
write, and solve for the price
Key Concepts
The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.
Ownership is struck on the post-money, always
The stake is the primary divided by the post-money, not by the pre-money. Dividing by the pre-money overstates the stake by exactly the ratio of post-money to pre-money, and it flatters every line downstream — the exit proceeds, the multiple of money, the required growth rate. It is the most common arithmetic error in this archetype and it always errs in the investor's favor, which is why it survives so many drafts.
At Series A the option pool is a large part of the price
A pool refresh created pre-money is funded entirely by the existing holders, and a Series A pool is several times the size of a later-stage one. The headline pre-money is not what the founders receive; the price per share the round actually strikes is lower, and the difference is the pool. A headline pre-money that does not name the pool is not a price, and a founder who has not been walked through this line has not been quoted one.
The position is a commitment, not a check
A later-stage check is the position. A Series A check is the first tranche of one, because the fund will be asked to follow its pro rata at every round that comes after. Underwriting the check alone produces a multiple of money the fund never had a chance of earning, and it hides the question that actually binds — whether the whole commitment fits inside the fund's concentration policy, and what has to be given up if it does not.
A pro rata right is not an anti-dilution right
Exercising the right to buy your ownership percentage of the next round does not hold your ownership flat, because the same round refreshes the option pool and the refresh dilutes the follower too. Both numbers belong in the reserve memo: what the contract entitles you to, and what maintaining the stake would actually cost. They differ by more than most reserve models assume, and the difference compounds across every round.
Dilution has two halves and one of them is invisible
Future priced rounds dilute you by the new investor's stake and again by the pool top-up each of those rounds requires. Modeling the first and assuming the second away is how a stake that looks like it survives to exit does not. At Series A there are more rounds in front of the position than at any later stage, so the compounding is larger and the shortcut is more expensive.
A non-participating preference has no closed form
Each series takes the greater of its preference and its as-converted share of whatever is left once the series that stay on preference have been paid. That interaction is circular: a later round sitting on its preference shrinks the residual an earlier round converts into, which pushes the earlier round's conversion point up. Solve it at each exit value rather than assuming a rule — and if you have followed your pro rata, remember that one of your securities can be converting while another is still on preference.
A preference is a floor at par, not protection
Below the total preference stack, a pari passu structure shares pro rata by invested amount — so a bad outcome returns less than the money, not the money. Above the stack and below the conversion point, every outcome pays exactly par, which is a wide band in which nothing you do changes the answer. The payoff only becomes interesting above the conversion point, which is why a mandate's tolerance for uncapped upside does real work rather than sitting there as decoration.
What you need to believe, not what it is worth
A venture underwrite that produces a valuation has answered a question nobody asked. Running the hurdle backwards produces a growth rate instead — a falsifiable claim about the operating business that the research can attack or defend. At Series A it also produces something better than a growth rate: a unit count. A required revenue restated as sites at full deployment is a number a warehouse operator, a salesperson and a partner can all argue about in the same language.
The hold period, not the price, usually decides a Series A
The same case, the same company and the same price can clear the bar comfortably on a ten-year hold and miss it badly on five. That is what compounding does over the horizons venture actually runs. Present more than one hold, say which one the recommendation is struck on, and get the committee to agree it — because approving the deal without agreeing the hold is approving two different decisions.
Quote the denominator, not just the ratio
A 144% net revenue retention computed on two sites and a 67% pilot conversion computed on six decided pilots are both true and neither is a curve. The honest version states the denominator beside the ratio, and prefers the conservative denominator where two exist — every pilot started rather than every pilot decided. A company will quote the flattering one, and an underwrite that adopts it has already made its first mistake.
Charge the capital once, and check it against the contract
In a robotics-as-a-service model the machine is capital and the service is margin, so gross margin should exclude the robot's cost and the robot should be paid back separately. Then the test that matters is whether one unit repays its own capital inside the contract that earns it. If it does not, a customer who declines to renew leaves the company holding an asset it has not been paid for, and the whole model rests on an engineering claim rather than a commercial one.
Recommend a price, not a company
'Good company, wrong price' is a complete answer and often the honest one, and so is 'right price, wrong clock'. Hold the exit constant, solve for the pre-money at which your own cases clear the bar, and say how far that sits from the ask. If the gap is small, that is the most dangerous situation of all, because it is exactly where a fund talks itself into a deal by adopting the one case it does not believe.
What Makes It Hard
The specific traps in this case — the places candidates lose the assessment without noticing.
Check Your Answer
Type the figures you produced and find out how many are right before you open the worked answer. You get a verdict and, where you are off, a pointer to the part of the build to re-check — never the number itself. Everything you type stays on this device.
How to type a figure. Digits, with an optional unit: 1,234.5, $1,234.5, 2.6x, 21.4%. For a negative use (20.0) or -20.0. Enter as many decimals as you carried — precision is never penalised.
What the Case Asked For
The arithmetic is only half of it. Tick off what you actually produced — this half is yours to score, because nothing can grade a written recommendation from a checkbox.
The Model Answer
The worked answer in full: memo, built the way a banker would actually build it. It is a reference, not a submission — a strong answer under the clock is far shorter.
What the Solution Covers
- —Underwriting pre-product-market-fit
- —Ownership and reserve planning
- —What-you-need-to-believe returns math at seed-stage outcomes
- —Founder and team diligence
- —Market sizing from the bottom up
- —Recommendation on price, not company
Memo
The written recommendation and how it was reached
Upgrade to Diamond
Sign up and upgrade to Diamond to unlock the memo and the audio walkthrough.
Get StartedDownloads are available to Diamond members
Memo (PDF) — yours to open, edit and rebuild
Walkthrough
A conversational walkthrough of how to approach the case under time pressure — where to start, what to cut, and how the recommendation gets defended.
Audio Walkthrough
How to approach Wrenfield — Series A at $80M
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
Why is there no deck?
Because the format is memo-first. The deliverable is seven to ten portrait pages of argument, and the exhibits sit inside it rather than replacing it. A venture partner reading this on a Sunday wants the recommendation on page one and the reasoning behind it; a slide deck spends its first four pages saying what a masthead says in four lines.
How much modeling does this actually need?
Less than you think, and it is a constraint on the prose rather than the graded artifact. The ownership arithmetic, the reserve plan, the waterfall, three revenue paths and a couple of sensitivity grids will hold up the entire memo. A Series A underwrite that needs a fifteen-tab operating model has stopped being an underwrite and started being a way of not deciding.
Should I build a discounted cash flow?
No. There is no discount rate in this exercise, no free cash flow to discount and no terminal value that would not simply restate the exit multiple. Importing a cost-of-capital debate into a Series A adds a page of apparatus and no information. If you want to test the exit assumption, grid the things a partner will actually argue about — how big the company gets, and how much of the position you have paid for by then.
Why run the hurdle backwards instead of forecasting forwards?
Because a forecast is an opinion and a requirement is a fact. Running the bar backwards produces a specific growth rate the company has to deliver, which anyone can then check against the market, the competition and the company's own history. It also protects you from the most common failure in this format, which is building a five-year model that arrives, by coincidence, at exactly the number the fund needs.
How should I handle a retention number computed on two customers?
Print it, name the denominator in the same sentence, and refuse to build on it. The honest reading of a company with a handful of customers is the decomposition, not the ratio: how much of the last year's net new revenue was expansion on a base that already existed, and how much was newly landed. Expansion compounds; landed revenue has to be re-bought every year. At this size that distinction is the entire question about durability.
Do I really need to model the reserve?
Yes, and it is the half of a Series A underwrite that most candidates leave out. The check buys the entry; the reserve is what keeps the position from being diluted away, and it is usually larger than the check. Model what the pro rata costs at each round, test the total against the fund's concentration policy, and then ask the sharper question — whether the follow-on dollars clear the fund's bar on their own, which they do only above a certain exit value.
Is a 1.0x non-participating preference downside protection?
Only in a narrow band, and less than it looks. Below the total preference stack a pari passu structure pays out pro rata by invested amount, so the money does not come back. Above the stack and below the conversion point every outcome pays exactly par. The instrument is best understood as a floor at par with a wide flat region, not as insurance — and at Series A the stack that sits alongside you grows with every round that follows.
What if the answer is 'no'?
Then write it, and name the price and the hold at which it becomes yes. A recommendation to pass that also says what you would pay is a stronger and more useful answer than a yes manufactured by nudging an assumption. The reviewer's next question is always what you assumed and why, and 'because otherwise the deal did not work' is not an answer that survives it.
How should reference calls appear in the memo?
Attributed by role and company, never by name, and quoted at enough length that the reader can judge the source rather than your paraphrase of it. Quote the strongest version of the argument you disagree with — a mixed evidence board is more credible than a stacked one, and leaving in the call that cuts against your recommendation is the cheapest credibility you will ever buy.
Is this format still used?
Yes, and it is the most transferable of the venture formats because it is what the job is. A round is priced, the partnership has a return bar, and somebody has to say in writing what would have to be true. The memo is the artifact the investment committee actually reads, and naming a price, a hold and a reserve is what distinguishes an investor from a commentator.
About This Venture Investment Memo Case Study
Venture Investment Memo case study for venture & growth interviews. 360-minute format covering underwriting pre-product-market-fit, ownership and reserve planning, what-you-need-to-believe returns math at seed-stage outcomes. Includes the full prompt, a written memo and an audio walkthrough.
This case study sits in Venture & Growth, under Investment Research Memos. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.
360-Minute Format
The time limit a real assessment would give you
Memo
Included in the model answer
Audio Walkthrough
How to approach the case under time pressure
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