Information Memorandum
What is it?
It is a form of documentation that assists management, the Board of Directors, and shareholders to make optimal investment and corporate decisions.
Key Features
- Purpose of the Information Memorandum. The purpose of the information memorandum is to show potential investors the beauty of the company as well as their growth potential.
- Roles and responsibilities. The management team as well as the investment ask and use of funds are highlighted in the information memorandum to help potential investors understand where the investment will go and how it will be used to provide returns.
- Audience of the Information Memorandum. The information memorandum aims to target strategic and financial investors whether they’re institutional investors or family-owned businesses who are looking to diversify their portfolio.
- Financing considerations. The information memorandum outlines the financial considerations and the use of proceeds of the investment.
- Exclusivity of the Information Memorandum. The business owner, Financial Advisor, and potential investor have exclusivity to the information memorandum as all parties have signed non-disclosure agreements for the proper viewing of the documents.
- Exit mechanism. The Information Memorandum will help entice potential investors to invest in the business as it will give them an inside look as to how the business operates and how well it coincides with their portfolio of investments.
Key Considerations
- Potential synergies
- Unlocking value
- Access to more resources
- Stronger financial position
- Disclosure of company financials
- Potential inequity in contribution of resources
- Requires clear and detailed agreements