An Information Memorandum is the standard capital-raising document for raising funds for small cap offerings through sophisticated investors. The information contained in the information memorandum is similar to that contained in a business plan. However, it is tailored to potential investors and makes an offer for funds.
Deciding what information to include comes down to what information would an investor want to know to make a decision. This depends on the type of business, the technology or business concept, the market it is selling into among other things.
The core elements which should be included are the business and business model, the market offering, competitive advantages, organisational capabilities, the directors and management team. In addition, the offer for investment needs to be made which include the investment sought, the offer to the investor of what they receive in return, the use of funds and a risk and mitigation statement. The legals in reference to what part of the law you are raising money under, who the offer is open to and disclaimers etc should be included.
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