An Information Memorandum (IM) also called as Investor Memorandum is a document which is prepared by the company promoters / Directors. This document gives clarity on all aspects of business and also provides clarity of how the company is planning for scaling to next levels.
It’s not necessary that this document information memorandum be prepared only for searching for prospective investors or buyers. It can also be used for existing investors also to have clarity of understanding of how the company has progressed and what’s the future and how the diversification is being looked at.
This document does not have any standard format as every business and every industry has different parameters and different goals and vision. The main aim is to provide all the information of the company to investors so as to evince interest in investing. Every company should tailor the IM as per the requirement and rather no focus of writing IM in some template format.
This document is very exhaustive as they include all details of liabilities, assets, industry details, growth achieved, description of business, distribution strategy, media & advertising details, positioning, communication and the financial strategies adopted.
Although the purpose of Information Memorandum is to motivate prospective investor for investment, it should not be framed as elevator pitch presentation it should simply be considered as an informational document on the company with purpose.
The importance of having a well detailed written Information Memorandum
Making it attractive & aesthetically to make it presentable and attractive. The content, information and smooth flow of thoughts and supported by figures & facts, it should also reflect the company’s objectives, top management profile, expertise & dedication in growing the company.
NOTE: When pitching to investors you need to give every, information so as to give clarity that your business is transparent, legally complaint and policies followed. First impression is the best impression.