A large amount of both treasure and time is spent by companies on marketing programs and marketing collateral to promote the business. Similarly issuers and sellers spend a great deal looking to draft an appropriate pitchbook for their stock offering or private business sale. Quality investment collateral can mean the difference between success and failure regardless of whether or not you are running a private placement or a outright business sale. Skimping on the essential elements of an extensive pitchbook or Confidential Information Memorandum (CIM) for your intended offering can be a bit short sighted.
As a company seller or issuer, a CIM/pitchbook or “book” includes all the essential and extensive elements of a business offering, including information on historical financial, marketing and operational performance, expected metrics on future prospects and information on personnel and other important qualitative measurements. Often private businesses are approached by an unsolicited offering from a single potential buyer. In this case, buyer and seller will typically sign an NDA. If the business does not yet have the “for sale” sign out, it is unlikely the selling firm will have the appropriate CIM or pitchbook in place. We often suggest a more broad-based marketing of the offering, rather than going with the first unsolicited bid, but that is a discussion for another time.
Even if the company is approached by a single buyer, it is important to put the company in the best possible light when entertaining such a potential suitor. The book will provide all the necessary elements a buyer would want to see when looking to make a strategic investment in the company. Typical books include the following: