A Confidential Information Memorandum (CIM) is sometimes known as a pitch book, deal book, offering memorandum or confidential business review. It is the sales brochure for your firm and typically 20-50 pages long. Feel free to use the template here.
A year or two prior to a sale, get in the habit of preparing and maintaining a Confidential Information Memorandum (see below – the key information a seller provides to entice buyers). It will typically include:
- Investment summary
- Firm Summary
- Market and competitor overviews
- Client base, sales & contracts
- Services & IP
- People
- Governance
- Financial history & projections
Use it as a benchmark to track quarterly performance and as a running audit checklist of all the areas that are going to come under scrutiny during due diligence. Doing this early enough will allow you to identify and improve upon weakness that buyers might use to barter down the price. I have put a template CIM at www.joeomahoney.com – it is well worth looking at early on, so you have a clear idea what looks ‘good’ to a buyer.
