Equity Story Development

---
name: equity-story-development
description: Builds the equity story an investor will underwrite, with a bottom-up market, a right to win, a financial algorithm, and the three objections answered before they are asked, when you need a narrative that survives an investor meeting.
---

# Equity Story Development Agent

## When to use
Use this when a company must be explained to public or crossover investors and the current version is a product pitch with financials attached. Typical triggers: preparing an IPO or a follow-on, rebuilding a story after a guidance miss, or testing whether a business can be underwritten at all. Reach for it once the numbers are auditable, not before.

## What it does
It produces an equity story: the market sized bottom up, the right to win with evidence, a financial algorithm linking growth to margin to cash, the unit economics that prove the algorithm, the three objections ranked by their effect on the multiple, and the KPI set the company agrees to be judged on.

## Method
1. Fix the audience. Decide who is meant to buy this.
   - A long-only compounder, a growth fund, and a value buyer underwrite different things; a story written for all three is written for none.

2. Size the market bottom up. TAM must be arithmetic.
   - Build units times price times attach rate, reconcile to a top-down source, then state SAM and current penetration. A TAM the company holds one percent of invites the question of why.

3. Establish the right to win. Name the moat, then evidence it.
   - Place the company with Porter's five forces, then support the claim with win rates, retention, pricing history, and switching costs rather than adjectives.

4. Build the financial algorithm. Connect growth to margin to cash.
   - State medium-term revenue growth, gross margin, opex as a percentage of revenue, the operating margin those imply, and the cash conversion that follows, naming the driver of each line.
   - Do not publish an algorithm the company has never demonstrated for a quarter; investors price the gap between the algorithm and the last four quarters.

5. Prove it with unit economics. Show one customer working.
   - Payback in months, contribution margin at maturity, and cohort expansion, computed on all cohorts rather than the best one.

6. Rank the three objections. Answer before they are asked.
   - Take the three things that would most compress the multiple, usually decelerating growth, a margin step never yet demonstrated, and a larger competitor bundling the product, and answer each with data the company already reports.

7. Set the KPI set you will be judged on. Fewer is safer.
   - Publish the smallest set that proves the algorithm; every extra metric is a line you must beat every quarter, and retiring one later looks like hiding.

8. Compress and test it. One paragraph, then one line.
   - Reduce the story to a line a portfolio manager can repeat to a colleague, then test it in a dry run against the objection list.

## Inputs
- Historical financials by quarter and the operating model behind them
- Market data with sources, plus the company's own customer and pricing data
- Win/loss records and retention or cohort data
- The medium-term plan the board has approved
- Peer disclosures and how comparable companies are valued
- Any prior guidance and the record against it

## Output format
- An audience statement naming the investor type the story is written for
- A bottom-up market build with the top-down reconciliation and penetration today
- A right-to-win section with the moat claim and its evidence
- The financial algorithm line by line, with the driver behind each
- Unit economics proving the algorithm on all cohorts
- Three objections, ranked, each with the answer and supporting data
- The KPI set to be reported, and the one-line story
- Present all schedules in prose, never as markdown tables

## Example
For Verano Logistics Software (fictional, illustrative), the bottom-up market is 120,000 target fleets at an average contract value of 14,000, or 1.68 billion; revenue of 240 million is 14 percent penetration, which is credible rather than heroic. The algorithm runs 20 to 25 percent growth, gross margin from 74 to 78 percent, and opex from 66 to 54 percent of revenue, taking operating margin from 8 to 24 percent, with 80 percent cash conversion giving a 19 percent free cash flow margin. Unit economics support it only partly: at 74 percent gross margin each fleet contributes 10,360 a year against a customer acquisition cost of 21,000, a 24-month payback that a growth investor will attack first, so it should be shown shortening by cohort rather than led with. The three objections are deceleration from 34 to 28 percent growth, answered with new-logo versus expansion mix; the unproven margin step, answered with the two quarters where opex leverage appeared; and platform bundling, answered with a 61 percent win rate across 340 competitive evaluations.