Will Interactive CIMs Replace the PDF?

A recent trend has emerged that is having at least some traction in the middle-market: the interactive Confidential Information Memorandum (CIM). The CIM is synonymous with CMM, pitchbook, pitchdeck or deck. The CIM is a detailed document outlining the business typically includes some or all of the following:

  • I. Process Overview (type of Process)
  • II. Company / Overview – Brand
    • Investment Highlights
    • History of Company
  • III. Industry Overview Problem ID (Cap Target)
    • Customer Segment / Trends
    • Sector Outlook
  • IV. Customers / Channel Partners
  • V. Products and Services
    • Growth Segments
  • VI. Sales and Marketing
  • VII. Competitive Landscape
  • VIII. Operations
  • IP Patents and Capabilities
    • Capacity Analysis / Process & Plan
  • IX. Organizational Review
    • Key Management Bios
  • X. Financials
    • Historical and Projected Income Statement
    • Balance Sheet
    • Capital Expenditure
    • Proforma
    • Re-Draft / Final Edits / QA

The CIM has traditionally has been made in Microsoft Word or Powerpoint and exported as a PDF, which is then sent to potential buyers and investors after an NDA has been executed. In some cases, the most creative dealmakers have produced short introductory videos where management is interviewed and the business is described in detail–almost in a documentary style. But, in most cases, the CIM’s formatting and style has remained somewhat unchanged for a number of decades.

Numerous groups have been trying to change that by providing direct,  online versions of the old pitchdeck. This new medium for the CIM allows for greater interactivity for things like graphs, charts and financial data. It also gives owners the ability to have greater control over the document’s access.

The interactive aspect of an online CIM is certainly a “nice to have.” A new format can make the old, boring pitchdecks more visually appealing and can likely hold a potential buyer’s attention for a greater period. However, as we have previously discussed, a good deal is a good deal and likely does not require the lipstick such a program would provide. In other words, good deals can stand on their own, even if they look outdated and ugly. The look of the deck is typically not what sells the best deals, it is the deal itself. For a company with a growing business and healthy profits, the deal can likely still get done even if the marketing materials are less than stellar.

Most buyers and investors–when looking at a pitchbook–will head straight to the financial statements. That is the first filter on any deal. Some pitchbooks may include a lot of lipstick, but no substance. It may sound like I believe unattractive and ugly CIMs are acceptable. That’s not it at all. In fact, that is the very reason we provide CIM preparation services. To the contrary, there is a great deal of value that can come from a well-prepared marketing memo. The latest string in online, interactive versions is likely not going to take off as quickly as many would like, for the following reasons:

  1. The marginal benefit of having an interactive version, is likely not greater than the marginal cost (of time and money) of having an interactive CIM drafted.
  2. The access limitations and control features of an interactive online CIM can already be easily replicated using a quality virtual data room.
  3. Today’s PPTX templates can get you fairly close to what a larger investment bank might create, without the cost of hiring an entire design team.

I may be wrong. The new interactive versions may take off more quickly than I suspect. It may be a way for investment bankers and M&A advisors to differentiate themselves in a crowded field. My guess is that the opposite may also be true. The best dealmakers have their methods and it may be difficult to teach an old dog new tricks, but I welcome the day when that shift occurs.


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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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