investment memorandum - a document which contains all the data of any enterprise, created to offer potential investors.The methodology by which it is formed, is well established and therefore you should not deviate from its rules.
Investment memorandum contains the information, the structure of which was drawn global investment practices, the rule of law, court decisions and simple worldly prudence.The information that there is, should allow any investor to make the required findings.Since the competence of potential investors can vary widely, the memorandum - is enough drawn up a document which allows to understand and assess the investment attractiveness of almost any one of them:
- If you take, for example, individual private investors, it is the least competentbut however it is best protected by law.
- At the institutional level of competence and documentation requirements are very high, especially if it acts as manager or joint pension fund.
- Corporate Competence may depend on its size, but also on whether it works in the same industry as the company that wishes to attract investment.
- Commercial banks may direct the investment for the acquisition of fixed assets of the enterprise, if it is part of their activities.
- Trade and investment banks pay much attention to competence, since it affects the well-being of their clients.
- But venture capital funds are the most demanding and competent, they are interested in the maximum openness and the opportunity to participate at every level of the firm, including personnel management.
- for government and funds sponsored agencies, the priority lies in achieving specific, pre-negotiated political and social goals.This may not be a return on investment - the main thing that was achieved the desired result.
Do not confuse the investment memorandum with the business plan, since the nature and purpose of these instruments are very different from each other.If the memorandum - a document aimed at attracting investors, a business plan is a practical guide to action for senior managers.Initially drawn up a business plan, which indicates the direction for further development, and then formed a memorandum to attract investment.It is unlikely that the firm will be able to access the investment if it does not have a good business plan.
Despite the fact that there are no hard and fast rules on how to be drawn up investment memorandum, an example of the structure that is in almost every source, includes the following required items:
- Summary - overview of investment opportunities.
- Review industries in which the company (general state of the industry, opportunities and threats, the state of environment, etc.).
- Information investee company (the history of the company, its organizational structure, the characteristics of the main shareholders and owners).
- production and characteristics of products.This section describes in detail all the stages of the production process and technology used.It also provides data on the cost of goods, existing patents and trademarks.Be sure to indicate opportunities for expansion of production and R & D.
- Marketing and Sales.There is a market analysis, marketing strategy used is described, identifies potential consumers of manufactured products.Given the dynamics of sales.
- Staffing (evaluation of professional level of both management and the workers themselves).
- Other corporate issues.
- Financial Information (feasibility study, basic accounting documents, etc.).
- financial plan (plan of the motion of Finance, the scheme return of invested funds, evaluation of possible financial risks, etc.).
usually written at the end of the general conclusions, recommendations, proposals.
Thus, as we see, the investment memorandum - a great way to attract investors.
