What is an Information Memorandum and what makes a good one?

An Information Memorandum (IM) is used to present a business to a potential buyer, investor or funder and to give them the information they need to make a well-informed initial offer to buy, or provide funding to, a business.

It's your chance to make that all important first impression upon the reader, convincing them to spend more time investigating and analysing the business. Like their title, most Information Memorandum's are too long and fail to capture the imagination and therefore don't pass the first hurdle.

CEO's, CFO's, Corporate Development teams and Investment professionals are not sitting around with hours to spare, waiting for your email or call. Indeed, they may receive hundreds of such documents a year and to attract their attention you need to deliver the key information they need within minutes so that you stand out.  

To be effective, an IM should typically embrace the rule ‘less is more’. Focus on the key drivers of value and try to cover key follow up questions but not at the expense of losing focus from the key messages:

• What does the business do and how would it fit into the buyer’s operations 
• What is the growth opportunity and strategy for the business 
• How does the business make money (historically and in the future)?  

At Heligan Corporate Finance, our approach to crafting a successful Information Memorandum is to cut out the unnecessary content and talk about the areas that will really make you stand out from the crowd in the eyes of the key decision makers. What matters most to buyers and investors is the product or service (which most trade buyers will already know about), as well as the culture and the quality of the people, which cannot be easily conveyed through a document. 

It’s crucial not to be afraid to do things differently - we know that this approach works and our team have been on the receiving end of numerous IMs, both within corporate environments and as private equity investors.