Confidential information memorandum
Contents
| Section | Starts on page |
|---|---|
| Notice and disclaimer | 1 |
| Executive summary | 2 |
| Investment highlights | 4 |
| Company overview | 5 |
| Business overview | 8 |
| Customers | 14 |
| Market analysis | 16 |
| Operations | 20 |
| Management and staff | 24 |
| Financial summary | 27 |
| Growth plan | 34 |
| Appendices | 37 |
| Data assets exhibit | 39 |
Notice and disclaimer1 page, from p. 1
- What goes here
- One page right after the cover. It says the memo contains forward-looking statements, that buyers must do their own checking and cannot rely on the memo alone (no reliance), and that all contact goes through the advisor and not through the company's staff.
- Buyers look for
- That the seller is not promising the numbers, and who to call with questions.
- Fill in
- Replace this with the notice your lawyer writes. Add the advisor's name and how to reach them.
Executive summary2 pages, from p. 2
- What goes here
- The whole story in two pages. A buyer who reads only this should know what the business is and what is on offer.
- Buyers look for
- What the business sells, who buys it, how it makes money, and what a buyer gets.
- Fill in
- Write one paragraph on the business, one on the numbers, and one on what is for sale.
Investment highlights1 page, from p. 4
- What goes here
- The five or six reasons to buy, one line each. Each one points to a number or a fact later in the memo.
- Buyers look for
- Reasons that are specific and checkable, not adjectives.
- Fill in
- List five reasons to buy this business. Put a number or a fact next to each one.
Company overview3 pages, from p. 5
- What goes here
- Who the company is: history, legal structure, locations and the people behind it.
- Buyers look for
- Years in business, ownership, and anything that changed hands or direction.
- Fill in
- List the founding year, the legal entity, the locations, the owners and the milestones.
Business overview6 pages, from p. 8
- What goes here
- What you sell and to whom. Products, services, pricing, customers and why they stay.
- Buyers look for
- How concentrated the customers are, how often they renew, and what is hard for a rival to copy.
- Fill in
- Describe what your customers buy from you, how you price it, and why they come back.
Customers2 pages, from p. 14
- What goes here
- A table of the customers that matter: who they are, how long they have stayed, what they pay and what share of revenue each one is.
- Buyers look for
- How concentrated the revenue is, the renewal history, and any contract that can end on a sale.
- Fill in
- List your top ten customers by revenue with years as a customer and share of sales. Mark any contract that needs consent to transfer.
Market analysis4 pages, from p. 16
- What goes here
- The market around the business: size, trends, rivals and where the company sits among them.
- Buyers look for
- Sources for every market claim, an honest list of rivals, and what could change the picture.
- Fill in
- Name your three closest rivals and say where you win and where you lose.
Operations4 pages, from p. 20
- What goes here
- How the work gets done: people, systems, suppliers, intellectual property and the tools the company runs on.
- Buyers look for
- Which systems hold the work, who owns the code and brands, and what breaks if one person leaves.
- Fill in
- List the main systems, the key suppliers and who owns the intellectual property.
Management and staff3 pages, from p. 24
- What goes here
- Who runs the company and who does the work. Roles, tenure and what each person would do after a sale.
- Buyers look for
- Who stays, who leaves, and how much of the business lives in the owner's head.
- Fill in
- List each leader with their role, years at the company and plans after a sale.
Financial summary7 pages, from p. 27
- What goes here
- Several years of results, plus the adjustments that show what the business earns for a new owner.
- Buyers look for
- Clean statements, a clear bridge from reported profit to adjusted profit, and cash flow by month.
- Fill in
- Add revenue, profit and each adjustment by year, with a note on every adjustment.
Growth plan3 pages, from p. 34
- What goes here
- Where a new owner could take the company next, backed by what the numbers already show.
- Buyers look for
- Ideas tied to evidence, with the cost and the people each one needs.
- Fill in
- Give three growth ideas, the evidence behind each and what each would take.
Appendices2 pages, from p. 37
- What goes here
- Supporting detail that would clutter the main text: contracts list, org chart, product sheets.
- Buyers look for
- A short index so they can find the proof behind a claim.
- Fill in
- List each appendix with a one-line description.
Data assets exhibit2 pages, from p. 39
- What goes here
- The company's records, listed as their own asset class: which systems, how many years, who holds the rights and what is left out.
- Buyers look for
- A clear inventory, the rights status of each system, and what has to stay out.
- Fill in
- Fill the table below. Add a line on how the records could be exported.
| System | Years | Volume band | Rights status | Left out |
|---|---|---|---|---|
| [System] | [Years] | [Add a band] | Not checked yet | [None listed] |
| [System] | [Years] | [Add a band] | Not checked yet | [None listed] |
| [System] | [Years] | [Add a band] | Not checked yet | [None listed] |
| [System] | [Years] | [Add a band] | Not checked yet | [None listed] |
Have your lawyer look at this before anyone signs it. They like having something to mark up, and it costs less than starting from a blank page.
Made with the Vaultfish templates. Not legal advice.
