Argh not another acronym?!? An IM is an investment memorandum or information memorandum. This document, used to inform prospective investors, is a detailed document vs the pitch deck which is written in engaging presentation style. It is a legal document so must be an accurate representation of your business given the intended use.

I’ve read a few in my time, some awesome ones, and it’s fair to say in my experience the companies who meet their raise goals easily have put more time and energy into building a compelling prospectus.

Just as an IM differs from your pitch deck, it also differs from your business plan in so much as it needs to paint a picture of the company including it’s history and past performance, your current state alongside the future growth and expansion goals this investment round will support.

I’ve seen an IM used effectively in a range of scenarios:
  • Seed investment and Venture Capital raising
  • Joint Venture or Partnership
  • Merger or Acquisition
  • Grant funding – although here in NZ this usually requires an application plus business plan

When invited to join a board or advisory function I find reading their IM the best vehicle to understand the company quickly – how it has performed to date, their product / market fit, offering, competitive landscape, future plans and intentions – proving a further use, engaging Directors or Advisors.

What should an IM include

This overview of content is not in table-of-contents order, rather a guide to ensure you have covered all of the bases. There are a few templates and slideshares floating around on the internet, or if you get stuck message me for mine.

Before I get into the details the key things an Investor needs to see (the minimum to include) is:

  • Your story, brand, purpose and aspirational vision
  • Your product / service, it’s roadmap and strategy
  • Who is on the team and advising you
  • Financial journey – to date, future expectations, EBIT, Valuation estimate
  • That you understand your market, competition, unique value proposition and there is a market
  • There are no skeletons or legal issues

In a little more detail by topic be sure to include these elements. Remember to inject some of your businesses personality, while the content needs to be factual if you are a quirky company don’t write a dry boring document. Be authentic too.

Legal “stuff”

Even if you share the IM with potential investors who have signed an NDA (non-disclosure agreement) it is important the document can stand alone so needs to include important legal information.

  • Confidentiality and Non-Disclosure Statement
  • Disclaimer Statement
  • Risk Warning
  • Jurisdiction and Country under which the IM is legally governed
  • Intellectual Property position (now and future)

The legal stuff can be upfront or at the end of the document.

Who you are and what’s happened to date

It’s important the IM paints a strong progression picture for potential investors, what is your product / service / value proposition, where are you at growth and revenue wise, who is involved, financial / growth history. State the facts.

  • Executive Summary, Background and Business Model
  • Product / Service Description (now)
  • Organisation and Team (now) incl Shareholder allocations & options issued
  • Financials (history to now)
  • Support structure (people, process, technology)
Market fit and Product

It’s not really cool to just say buzz words or that your business “is the uber of” some industry. Do the work and be able to defend the position you describe.

  • Market Segment / Size and Fit Validation
  • Competition Assessment and Niche or Advantage (now and future)
  • Product / Service Roadmap (future)
  • Financial Position – EBIT, Valuation (if done per current state)
Strategy and Future Potential

This is the more subjective part of the IM so needs to be as robust and defensible as possible, the more detail to support your financial estimates the better, including customer acquisition numbers even cost to serve per customer etc rounds out the perspective.

  • Financial Potential – EBIT, Valuation and method
  • Financial Models (future)
  • Short term growth and expansion strategy
  • Longer term growth and expansion strategy (future)
What will the funds be used for? and what’s in it for me?

Finally woven into the fabric of the document needs to show what’s in it for the potential investors. Be very specific about share allocation and options. You also need to describe in some detail how the raised funds will be spent, your projected cash burn demonstrates an additional level of planning.

  • Share allocation and option information
  • Board appointment intentions
  • How the funds raised will be spent and support the projections
  • A timeline of where this raise sits, what’s next

Remember the IM isn’t a sales pitch document, that’s the pitch deck. It does however need to tell the story but that story must be demonstrable with evidence and detail. A savvy investor will ask you many questions so as the cliche goes – the devils in the detail – as the founder you need to have that detail at your fingertips during this process.

Good luck with the venture! Vic.



There is a for every scenario. Thanks Scott Adams and your fab team.

Victoria MacLennan is a busy business owner, investor and director. She is passionate about diversity, women in both leadership and technology, organisational governance and focuses much of her time on strengthening the New Zealand economy through Digital and Technology. You can read more about Victoria here.