Pich Deck/ IM (Investment Memorandum) Services

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New businesses often require significant capital investments to get the business running. Also, selling a business or scaling up requires third-party investors to support and claim a stake (partial or total) in the business, often facilitated by financial institutions. Logic Figures can facilitate access to private investors and institutions and help you design an impactful Investment Memorandum. We help you prepare an investor memorandum, in order to explain the capital needs of a business to potential investors.

Disclosures: A prospectus and investment memorandum may require different disclosures from the business. For example, private investors typically want to know more about a company’s financial health and outstanding debt. While public investors require similar information, they may also require information on the business’s moral or social standings or how they plan to reduce emissions

Logic Figures can only support you in developing Investment Memorandums but can work with partners if you need to develop a Prospectus instead.

What is the difference between an IM and Prospectus

A prospectus and investment memorandum are similar in that they bring investors to a business, but there are some key differences between the two. These include:

  • Public vs. private offering: When a business makes a public offering, they use a prospectus rather than an offering (investment) memorandum. The prospectus is designed to appeal to public investors instead of selected private investors. The offering memorandum is tailored for specific investors, often in niche industries or for businesses that fulfil a specific function within their industry.

Why is an investor memorandum important?

An investor memorandum is important because it details the business’s standing as a good or average investment. The memorandum acts as an overview of the business or a modified business plan (it contains specific sections from the Investor- ready business plan). Investors need to understand the details of your business before they invest their capital.

The memorandum is an opportunity for a business to show its strengths, and capabilities and talk up its prospects to highlight why it’s a great investment. Logic Figures typically prepares and pitches the memorandum to selected potential investors, but the business’s executive team can also take part in the process to form a closer bond with investors.

Investor memorandums typically include details on the business structure, roadmap, org chart, financial risk and health and other important details. These details help an investor determine whether the risk is acceptable and if there is an upside for them to invest in the business

Here’s what’s included in a typical memorandum (note- depending on the company some of the sections below might not apply and others might be required):

  • Business Summary: This section provides investors with a basic overview of the company. This can include things like the name of the company, the addressable market where the company operates in, the capital needs of the company and a brief introduction to the leadership of the business plus brief financials and forecasts. This section helps investors form a good first impression of the business, showing organization and solid business structure.
  • Offering terms: This section explains the details of the business offering for investors.
  • Risk factors: This section details the business’s various risk factors, including outstanding debts, competitor risks and legal framework and risks.
  • Market Opportunity. Why now. Why you? Why this market and why is this a great opportunity
  • Company description and management team info: This section goes into detail about the company’s leadership structure, with summaries of the leadership team and a more in-depth overview (including technical aspects) of the products or services the company offers. It also details the competition in the industry, marketing and sales strategies and the company’s goals for the future. The leadership team’s individual skills and biographies are typically part of an investor memorandum.
  • Proceeds usage: in this section, the company details how it uses the capital raised from the private offering.
  • Securities description: This section details the securities offered by the company as they relate to investors. It describes the type of shares and dividends that investors can expect to receive and whether the business might change its capitalization later.
  • 3 years (past financials) plus YTD and forward projections. Normalised sets of management accounts plus statutory accounts/ tax returns (including for both balance sheets).
  • Exhibits, Procedures, Annexures, Others.

A pitch deck is a presentation deck that is used to pitch your idea or company to investors. It is a more detailed version of your elevator pitch. One of the single most important aspects of creating an effective pitch deck is to organize it based on the audience and forum to which it is being presented. For those not qualified as “sophisticated investors”, you have to tailor it one way compared, say when going after VCs or high net worth individuals Several key components to a pitch deck include high-level summary slides, the problem you are addressing, the product, the market/strategy, the team, financials/projections and the tone you want to convey. But most importantly, your passion and vision moving forward.

Remember, people, invest in people and their ideas. So, people first. As such, they have to believe you.