Prospectus LLC is a world leader in the creation of information memorandums, also known as confidential information memorandums, or CIMs for short.
Companies use an Information Memorandum to target investors that they can raise capital from. This can be in the form of equity or debt. The verbiage used to identify documents created for the intention of raising capital varies with each country across the globe. In Asia, most companies refer to offering memorandums as Information Memorandums. For the most part, they are often used by broker dealers, firms that specialize in M&A (Mergers and Acquisitions), and other advisory institutions.
Just like other offering documents (prospectuses, PPMs, and offering memorandums), the Information Memorandum, or IM for short, is also utilized to obtain funding. This document includes pertinent information about investment in the company issuing it. It includes this information so that potential investors can have all the information they need to make a well-thought out decision on whether to invest in a company’s securities or not.
Valuation of the Business
One of the key factors for drafting an Information Memorandum is so that a business can present its valuation to all of its prospective investors. However, on average, the IM does not disclose the value, or pricing, of the company or any of its other components. The reason is because if a business were to give away its value, it would most likely receive less capital than if it kept that information to itself. An Information Memorandum should have enough key information for any prospective purchaser of the business to make its own valuation. Once the interested party thoroughly studies the IM and creates their own valuation of the business, they will most likely return to the company that issued the IM with an offer.
Prospectus LLC can help with processing of the IM and any company’s valuation. With our experience, we can protect any of our clients from lowball offers.
Attributes of the Information Memorandum (IM)
The Information Memorandum should include the following aspects:
- Thorough description of the business, its products and services;
- Summary of the sale and structure of the offering;
- Description of the market opportunities, and industry trends;
- Competitive analysis, barriers to entry for new competition;
- Risk Factors;
- Financial projections, historical performance, future projections;
- Management team, skills, and future personal needs;
- Growth opportunities and scalability;
- Future products and services.
Quite often, the IM is seen as a marketing document in addition to a document providing information about issued securities. Although it is not technically written as a marketing tool, it is in fact the best vessel for marketing information that a company can provide if they want a sale of any type. The Information Memorandum already contains most key aspects of a company, and, as a result, it is the most useful document that a business can use during the process of a sale. Just like any other proper business document, however, the business should include all material, key information and facts and completely omit exaggerations.
Here at Prospectus LLC, our team has tremendous experience developing IMs while working with our clients and making sure that all relevant information is disclosed in the document. We also draft the document in a way to make it attractive to investors, increasing the chances that you will successfully raise capital or execute a profitable sale.
- Prospectus Writing
- IPO Stock Exchange Listing
- Bond Offerings
- Feasibility Study
- Hedge Funds and Mutual Funds
- Offering Memorandum
- Private Placement Memorandum
- Offering Circular
- Explanatory Memorandum
- Information Memorandum
- Fund Setup Formation
- Securities Identifiers
- Registration and Filing
- Legal Work
- Escrow Services
- Business Plans