How to Draft an Info-Memo

How to Draft an Info-Memo. If you need financing, investors, partners, or simply sell your company … you need to have prepared an info-memo.

An informational memorandum (info-memo) is a document that highlights the most important aspects and opportunities that your investment offers. An info-memo should include analysis, projections, and explanations that are too time consuming to disclose during a meeting with potential investors. Essentially it is a document that markets your investment, in the sense that it should motivate investors to want to invest in the company. However, it needs to refrain from exaggeration or omission, and provide a complete disclosure of all the material facts.

1- Letter from the Director

• • Summarize the business and future ambitions of the company.
  • This is the most personal part of the memo where it is important to inspire the investor by introducing your vision for the business and any relevant skills and past experiences.

2- Investment Highlights

• • Bullet pointed list about what makes your company special and any highlights of the investment.
  • The investment highlights are usually the first thing that an investor reads, which is why it should be simple and convincing in order to persuade them to keep reading.

3- Executive Summary

• • One or two-page summary that includes: background of the company, market opportunity, unique features of the business, track record, financial projections and necessary funding.
  • The executive summary acts as a succinct summary of the business plan which is why it is important to only include the most significant points of your plan.
  • Tip: Use headings to correspond to sections of your Info-memo so that investors can easily refer to certain points.

4- Company History with Milestones

• • Include the date of incorporation, phases of development, current shareholders, major agreements, employee expansion, and prior financial performance metrics.
  • It is important for investors to see the progression of your company because it helps them to ensure that your aspirations are in alignment with theirs.

5- Expansion Plan

• • Give a conservative estimate as to where your company should be in the next few years.
  • Set goals supported by reasoning for the next few years, for example: Increased investment, increased number of employees, expanding product lines, etc.
  • It is important to be specific about which aspects of your business you plan to expand but also remain conservative in your estimates.

6- Market Overview

• • Provide market size, target segment, and issues, growth potential, competition, SWOT analysis.
  • It is extremely important to know all the facets of the market you plan to enter, because it proves to the investor that you have done the research and understand where and how your company fits into the market.

7- Key Success Factors

1. 1. Concrete data that can represent performance and benchmark success for investors.
      • Acquisition Metrics
      • Retention Metrics
      • ROI
      • Awareness
   2. The concrete metrics are important for investors to know what results they should expect in the near future.

8- Risks

• • Potential risks from the market, industry, and government as well as mitigating strategies to ensure success.
  • Address the assumptions made throughout the Info-memo and list the risks in order of significance and likelihood of occurrence.

9- Business Team

• • Pictures and bios of the business team as well as any relevant skills, connections, or experience.
  • Especially for startups in the early growth stages, investors will look at the team within and surrounding your company as well as the skills and knowledge they provide in order to ascertain the probability of a start-up’s success.

10- Financial Information

• • Include previous financial records, projected growth (with target revenues and customers), and assumptions used to calculate or estimate these figures.
  • The projections or assumptions within the financial summary should be supported by the strategies previously mentioned throughout your Info-memo.

11- Investment Offer

• • Company valuation, necessary capital, source of funding, plans for the investment, and time to actualization.
  • It is important to have confidence in your offer because it should be supported by the research and figures within your Info-memo, however being open to negotiation is equally as important when it comes to closing the financing round.

12- Other Information

• • Any remaining relevant information (legal statements, financial statements, data)
  • It is important for your Info-memo to stand alone, therefore it’s wise to include anything additional you believe investors could want to see.

Conclusion

Regardless of the quality of your pitch, as soon as you leave the room your Info-memo is how you’re going to be remembered. When investors are considering your project, the only information they have to review is what you give them after your pitch is completed. The document should be succinct, realistic, and most of all well-organized, so possible investors know exactly where to look in order to obtain the necessary information for them to make a decision.