Skip to main content

How to prepare an information memorandum?


An information memorandum is an important document that an investor would request for. An information memorandum sets the base for your capital raising plans and throws light on the past, present as well as the future plans you have for your business. 

Here are some important headings you must include in your information memorandum. 

Letter to Investors

This could be a Director’s Letter or a Chairman’s Letter. The letter must summarize your journey so far as a business and where the business is headed for. Keep the letter brief but pack in a wallop in every word for maximum punch. Keep it no longer than one page. 

Investment Highlights

This is pretty simple. You could include a bullet list detailing the returns that investors could expect if everything goes as planned. However, it’s not only about the numbers. If you have an edge over the market in some form, highlight that fact too. 

Executive Summary

This is where you summarize the rest of your report. The executive summary provides a brief overview of the business and explains the reason why you’re raising funds. Investors can glance through this to get an idea of your proposal without having to read through the entire information memorandum. 

Business Plan 

This section outlines your business plan. If your business has changed since you initially wrote the business plan, you might want to update it as necessary. You can include details such as success factors, your business model, the market dynamics and the corporate structure. 

Risks

The risk is very much a reality in every business. Even if you have established a monopoly, or are far ahead of the competition, your business is prone to risk. In this section, talk about the possible risks your business faces and what you’re doing to manage those risks. 

Executive Team

This is a good opportunity to showcase the kind of value your upper management team is adding to the business. Provide details about the board of directors as well as the advisory board members. 

Investment Offer

Time to get to the point now! Your investors want to know about the returns they will receive for their investment in your business. If the business is already showing healthy profits and the cash flow is positive, you could throw light on the earnings multiple as well as valuation. If you are a start-up with marginal revenues, focus on the strategic value. 

Financial Statements

Your investors would like to take a look at your operating history. Be sure to include the balance sheet, profit and loss statements and cash flow statements for the past two years at least. If you are a start-up without any history of previous revenues, then generate an estimate for these reports. 

In Conclusion

This outline should give you a clear picture of the kind of information you will need before you can start pitching for investment. You can choose to prepare this information on your own or for best results, hire a team that is very much specializes in preparing information memorandum. 

Are you looking for professional business plans for your business? Business Plans is one of the leading business plans solutions providers in Australia. They offer high-quality business plans for your business at reasonable rates. 


Labels:

Comments

Post a Comment

Popular posts from this blog

How to Prepare an Information Memorandum for Investors?

Your investors want to know more about baseball and generally sports. All investors wish to know whether they can receive their money back should the deal go south. They want to see the current market, and if the company will be sustainable in a future market. They expect to see a breakdown of how you plan to spend their investment in the first year. Early stage investors are not going to need to read such a long and thorough document. If you're soliciting investors for the very first time, you may likely use the private issuer exemption. At the extreme, investors should be careful of fees which are too low. Some institutional investors may want to take part in operational decisions and might insist on particular provisions. Some investors are searching for an emotional relation to the company, but large sophisticated investors are often on the lookout for hard facts so make sure you include the important metrics and numbers that support your investment case. If you'd l...
1 comment
Read more

Tips for building perfect information memorandum

You have an investment meeting coming up. Your pitch is ready and you’re all set. You will need a top-notch information memorandum (IM) that you hand over to investors after your knock-out pitch. A confidential information memorandum is a short document outlining your business plan. Usually running for 20 to 30 pages, your IM includes projections, analysis and explanation that you could use to pitch to your investors without boring them to death. Here are some essential aspects to cover in your information memorandum. Financials Be sure to include critical financials supported by explanations and pricing strategies. Include comments and notes where necessary. Lease and Rental Terms What are the lease and rental terms? What is included? Are storage, car parking and outgoings included in the lease contract? What is the rent and what are the payables? What’s the GST component? If there are any unique aspects or improvements that are required in the office space,...
Post a Comment
Read more

Developing A Powerful Capability Statement | Business Plans

Writing an ideal Capability statement is something that comes with the combined factors of having a full understanding of your business and copious amounts of re-writing.  Having a fully functioning business that stays fresh by maintaining collaborations with other businesses, employees and clients require a well-worded capability statement. But What is a Capability Statement ? A capability statement is a document that highlights the core part of your business. It conveys information about your company (like background, experience and areas of expertise) that will be relevant to people who want to take part in your business in any capacity; be it an employee or a client.  Depending on how good your capability statement is, people can choose whether or not they would like to engage with your company.  How can it help your business?  A well written capability can go a long way in terms of making collaborations happen in any business. When you hav...
Post a Comment
Read more