What is an Information Memorandum?

One of the key initial processes involved in selling a business is compiling an Information Memorandum, or IM. This is a document you will provide to prospective investors after they have signed a Non-Disclosure Agreement and is designed to give them all the necessary information with which to help them come to a decision on whether or not to buy your business. This valuable marketing tool will also assist with filtering out any timewasters.

Why Do I Need One?

From the investor’s perspective a good, well presented IM demonstrates the motivation and commitment from the seller and shows the professionalism and quality of the management team; vital when the investor has to work with them after completion. An IM enables a business owner to show potential investors a comprehensive, accurate and factual picture of their company. These are important factors which will have an impact on whether an investor buys a business or not. The IM also ensures that all investors get the same information and it is easier to maintain control over what information is shared and what isn’t. The more information you can put into an IM will mean fewer questions and so more efficient time saving.

When preparing an IM you must strike a balance between motivating an investor to invest in the company and being careful not to exaggerate or omit information. It must be a fair and honest depiction of ALL material facts. Omission or exaggeration will serve only to diminish the credibility of the company and its management.

The provision of an up to date IM is standard practice in business sales and investors will expect to receive one. If one is not forthcoming this could severely damage your chances of a sale as they could withdraw their interest in the company.

Does Kingswood Help to Create the IM?

At Kingswood we have years of experience in creating professional, informative and attractive IMs. We can advise you on all aspects of putting together a comprehensive IM; one which contains all the essential key facts needed to present your business ready for sale. We will work with you to discuss what you need to provide and once you have given us all the information we need we then create the document around it. This way you have full control over what information you are happy to share. Once the IM is created and approved it is then ready to be sent to any interested parties. You will be kept informed at each stage and you can be sure that no information will be given to anyone without your explicit consent.

An Essential Marketing Tool

Just as you wouldn’t apply for a job without submitting a CV, so you shouldn’t think of marketing your business without an IM. A high quality IM is the most efficient way of providing a large amount of vital information to investors and, done correctly, is vital to enhance your business sale prospects.

You only get one chance to make a good impression so why not call Kingswood? Professional, friendly advice is only a phone call away.

When we chose Kingswood to sell our business we believed that their simple, easy to understand proposition to sell our business “a better way” was just what we wanted.This is exactly how it worked out with professional support from beginning to end. And the fees were exactly as quoted!

I would use Paul Holohan and his team at Kingswood again without question.


Bob Hanks