Information Memorandum

Information Memorandum (IM) is the objective perspective of your business that you will provide to potential investors and buyers. It contains a package of documents of marketing and company overview, which will motivate them to funnel capital into your business.

However, an information memorandum differs from other documents as it cannot work as a pitching mechanism. It can only simply present relevant information specific to your business and industry so that the investor can make an informed decision. It will address with transparency and holistically assess the company’s operations and profitability.

It would help if you were careful not to exaggerate any information by stating false facts when making it look like an attractive opportunity to your investors. It should be wholly research-oriented and specific to your company and industry.

When preparing an IM, you must include details relating to

• Company’s Overview and History
• Products or Service Descriptions
• Operation Plan
• Financial Standing, including historical performance and future projections
• Market Analysis and Promotional Strategies
• Risk Factors
• Growth Opportunities and Scalability
• Management teams’ strengths, skills, and future needs

You still want to ensure that your company is presented in the best possible way for your investors. Another critical piece of information you must keep in mind is not disclosing too much in an IM without anyone signing a nondisclosure agreement (NDA).