A good IM, the abbreviation for investment memorandum or information memorandum, is crucial in company sales or raising an investment. But what requirements must a good IM meet and what information does a buyer or investor want to read? Fortunately, we have already written a lot of IMs! We would like to share the nine basic elements, plus 1 bonus tip, of a good memorandum.

Tip: click here for a handy printable infographic of the basic elements for an IM

1. Mission and vision

Everything starts with your mission and vision. In a few slides you give a description of what your company stands for, what conviction motivates you and what your raison d'être is. The vision reflects a dream for the future and makes the mission concrete. Our most important tip; make sure it is inspiring for the reader and shows that you have a thoughtful view of the future. Where is the world heading and what distinctive position does your company occupy?    

2. Market Analysis

A number of slides in your information memorandum are about the market. Start by outlining the problem you see. Support this with external (reliable) sources in the form of graphs, headlines or parts of a report. In this way you display the pain in as objective a way as possible. Next, it is important to devote one slide to the Total Addressable Market (TAM) you are targeting. A buyer or investor is always looking for potential; therefore make this concrete.  

3. Your solution

You have displayed the pain in the market analysis. Now it's time to explain your solution. Use illustrations, examples and other rich content to paint a clear picture of your product or service. For example, consider an explainer video. Furthermore, it always works great to see a before and after picture. In other words; how complex would the world look without your solution and how great is the world with your solution.  

4. Competitive position & track record

Now that we have a clear picture of your company, it is good to clarify your competitive position and showcase your (possible) track record. Is there a solution for your Magic Quadrant from Gartner? Great, then use that to show what the competitive field looks like! If not, create your own quadrant based on the same principles and plot your business in it. Do you already have a track record with existing customers? Then display it. Big name logos work well, but even better add a reference video or some quotes.    

5. Opportunity

Potential, we've talked about it before, is one of the most important factors in company sales or an investment project. Therefore, create a chapter with your intended roadmap for the next three to five years. Concrete growth opportunities in clear steps by describing your vision with regard to topics such as: commercial growth, internationalization, the further development of your product, etc. 

6. Earning Model

How does your company earn money, that should become clear in this slide of the information memorandum. keep you revenue model as simple as possible. A Chinese menu card is out of the question. Do you need more than one slide? Then go back to the drawing board. It must be easy to sell your product and to attract new customers quickly and easily. OK, you can use an extra slide for your upsell proposition. But that's really the maximum. 

7. Valuation or investment need (and offer)

At this point, the potential buyer or investor has an excellent picture of your company. At the sale of a company it is good to give a picture of the valuation indication. Do not give a number, but rather use a reliable source with market-based multiples. In this way, the buyer gets an indication of the intended sales value. In the case of an investment, it is important to mention a concrete amount. It is also important to provide an overview of your offer. In short, what does the investor get in return. Is that a (convertible) loan, share percentage or other form?    

8. Financial Information

Use one or two slides for some extra financial information. Think of a first slide with more information about the turnover, costs and profit of the past three years and the current year. This gives a good picture of where your company is now. The second slide can then provide more detail about the intended investments and returns for the next three to five years. 

9. General Company Information

In the last chapter of the information memorandum it makes sense to add some general company information. Think of the legal structure, the office and your team. It is also important to present the DGAs here. It is sometimes said; first the guy, then the tent! It is therefore important that you position the DGAs strongly.  

Congratulations! The contents of your information memorandum state. However, we have one more crucial tip and that is the professional formatting. It is arguably the single most important element of an IM. Therefore, have it drawn up by a graphic designer. Delete long texts and replace them with clear illustrations or catchy bullet points. Also think about a catchy title, page numbers and a disclaimer. It's all small things, but oh so crucial to a good impression. 

By the way, don't just send your IM to just anyone. First, make a teaser with two pages of basic information. If you are interested, we advise you to have a Non-Disclosure Agreement (NDA) signed before you put all your sensitive company information on the table. Good luck!