Business model
Foundation- Simple revenue engine and identifiable customer
- Healthy unit economics and repeat demand
- Clear path from revenue to free cash flow
- Growth depends on constant outside capital
- Economics are difficult to explain plainly
Research criteria
A better thesis begins with a better checklist.
Use the criteria below to move beyond ticker stories and test the business, numbers, advantage, valuation, and risks with evidence.
The full frame
Score the argument, not your excitement.
Green flags strengthen the thesis. Red flags deserve explanation, conservative assumptions, or a decision to pass.
Financial quality
25%- Consistent revenue, margins, and cash conversion
- Manageable debt and strong liquidity
- Share count and compensation stay disciplined
- Adjusted profit hides weak cash flow
- Debt or dilution funds ordinary operations
Competitive edge
20%- Switching costs, scale, network, brand, or IP
- Stable customer retention and pricing power
- Returns remain attractive through competition
- Product is easy to copy or replace
- Growth requires permanent price discounting
Management
15%- Capital allocation matches stated priorities
- Communication includes mistakes and tradeoffs
- Incentives reward durable per-share value
- Targets change whenever results disappoint
- Acquisitions hide weak organic performance
Valuation
20%- Base case allows an acceptable return
- Assumptions fit the company's real economics
- Downside scenario is survivable
- Price requires flawless execution for years
- Only optimistic multiples support the thesis
Risk and evidence
20%- Key risks have measurable review triggers
- Thesis includes evidence that could disprove it
- Position size reflects uncertainty
- Every negative fact becomes an excuse
- Thesis depends on price going up first
The one-page thesis
A useful thesis should fit on one page and remain specific enough to be wrong.
Claim
What does the market misunderstand?
Name the gap between your view and the current expectations.
Proof
Which facts support the claim?
Use filings, calls, customer evidence, unit economics, and financial trends.
Break
What would prove it wrong?
Define the evidence before emotion has a reason to move the goalposts.