CHOREOINVEST offers a set of Investor Oriented Documentation Programs for those seeking funding or sale of a business in Russia or Eastern Europe, particularly for cross-border or international investors.
The Information Memorandum – Puts your investment program in the express lane
A concise, well-written Information Memorandum saves time, and time is money when a company is seeking an investment, sale of shares or assets, or divestment of a business. A good Information Memorandum puts forth a strong argument on behalf of the business, and it helps potential investors speed up the review and decision making process. The purpose is to make the business and its environment transparent and understandable.
Modern financial and strategic investors are savvy and have access to enormous information resources, but the costs to analyze cross-border investments can be expensive and time consuming. Professional investors usually have clear investment criteria and experienced staff to examine opportunities. In many cases, a partner or principal reads a blind profile or a summary, and may meet representatives of a target business, but passes it to an analyst for in-house due diligence if the investment looks interesting. A well-drawn Information Memorandum clearly presents the opportunity from the first page, and then clarifies the important opportunity and risk elements to facilitate the analyst’s work.
An Information Memorandum is very different from a Business Plan (which describes a business’ operation in great detail and forecasts for future performance) nor is it a Marketing Brochure. The Information Memorandum:
- Describes the current mission, objectives and market position of the business;
- Provides relevant market information and the company’s position in the market in terms of product, price and promotion;
- Gives a brief history of the business, and its organizational structure, locations and employees;
- Provides background information about the directors, management and key employees;
- Outlines the legal and regulatory position including legal organization and registration, licenses and tax position, and any current legal or tax issues;
- Summarizes risks that are specific to the business’ activities, market and region;
- Details the proposed investment and planned use of proceeds from the investment.
The Information Memorandum should be well written and relatively brief (25- 30 pages) with a one-page summary. It may be supplemented with more detailed information about the business and its markets – the appendices are where a business plan and marketing materials as well as market reports, region reports, regional tax information and other materials that an analyst.