Information Memorandum (IM)s is a document given to prospective investors by a company attempting to raise capital. The IM is usually supplied after investors have reviewed a brief Investment Summary, or some form of initial pitch document (aka teaser) and signed a Confidentiality Agreement.

IM’s are usually targeted at “Sophisticated Investors” who are not protected by the layers of regulation and red-tape that are applied to “Retail Investors”; therefore the law’s position on sophisticated investors assumes they have the skills, knowledge, money and track-record to competently make investment decisions (if they lose their money then they understood the risks that could result ion that and still chose to invest).

An important distinction from a “pitch deck” is that an IM by Australian law, must contain a full, true and complete disclosure of all information which may materially affect the value of a company. Sometimes referred to as an offering memorandum – both are legal documents which state the objectives, risks and terms of an investment involved with a private placement. This document must include items such as a company’s financial statements, management biographies, a detailed description of the business operations and more.

The prospectus and IM are very similar documents. Most of the information you are legally required to include in the prospectus will be included in your IM, but have a lawyer look over your IM to ensure you have included all the necessary information.