An offering memorandum, also referred to as a confidential descriptive memorandum or “the book,” is a factual and compelling document that increases the chances of selling your business for the highest possible price. It also provides potential buyers with all the essential information about the company and the proposed transaction upfront.
The Executive Summary portion of the offering memorandum allows for a bit of “selling the sizzle” by briefly describing ownership and management structure, financial highlights, company products and/or services, markets, reason for sale, and any other major selling points.
Moreover, an offering memorandum is a document that details a company’s financials and business model. It is meant to attract potential investors, and as such, should include a summary of the company’s strengths and opportunities. The executive summary, then, is a brief overview of the contents of the offering memorandum that should entice buyers to learn more about the company. Some key components of an effective offering memorandum include:
- Executive Summary
- The Company
- History of the Company
- The Markets
- The Products
- Distribution
- Customers and/or Clients
- The Competition
- Management
- Real Estate
- Financials
- Growth Strategies
- Competitive Advantages
- Conclusion
- Exhibits
An offering memorandum is a key document for business owners seeking to attract potential investors. It should be compelling and thorough, outlining the company’s opportunity for growth. It should also be professional and easy to read. By creating a well-crafted offering memorandum, business owners can give potential investors a good idea of what their company is all about.