Investment Memorandum: how to pull off your IT project (2023)

8 Things you should do before seeking funding

  1. Establish your company
  2. Assemble your team with technical, marketing and sales skills
  3. Undertake comprehensive preliminary market research and competitive analysis
  4. Set domain name
  5. Create a website or landing page
  6. Build a prototype
  7. Do real market tests with potential users and buyers
  8. Provide a complete analysis and P&L forecast along with the development strategy

All this may take a few weeks to work. But no matter what stage you’re at, it takes a lot of time to raise investment funds.

Prepare investment promotion and investment memos, answer investor questions and demands and prepare yourself for the countless obstacles of time and energy-consuming activities.

Where to Start?

$ 20.000 Instead of planning to raise $ 250,000, focus on finding $ 10,000 - $ 20,000 in your own pocket to start right now.

MVP Use this money to create an MVP, get the initial user and let people work for you.

Need help with MVP?

Get in touch

Startup Platforms

There are special platforms to help startup entrepreneurs. They provide information, research and assistance in all aspects of launching a new project, including communication with investors. For example, offers a convenient channel for effective investor searches. Today, has more than 14 million users, making it the largest startup community in the world, offering exceptional opportunities to attract investors both to finance the project and as consultants. Another platform,, has already invested more than $1 million in various startups.

(Video) Offering Memorandum Walkthrough - NNN005

Network of Business Angels

Angel investors not only give you money, but also literally follow every step, prompt and guide, and most importantly share contacts and introduce you to the business community. You can start searching for such an investor on platforms like, Angel Investment Network and Angel Capital Association, where thousands of investors are represented and the various types of investments are described.

Crowdfunding Sites

Where can you find the most unexpected, non-standard investors? These are on crowdfunding platforms. Starting from the widest Internet audience, where ordinary users support projects they’re interested in (sites like Kickstarter, Pererbackers and Indiegogo), and ending with philanthropists wandering in search of those whose old dreams they can help to realise (RocketHub). There are also accredited investors, hunters for new ideas – for example, OurCrowd. Each crowdfunding site has its own specifics and its own way of attracting investors, so carefully study all the options to choose the most appropriate for your strategy.

Business Incubators and Accelerators

Your startup is your child and you need to take care of it accordingly. If you want the project to grow and prosper, consider the option of cooperation with an incubator or accelerator. Such investors usually want to be actively involved in the implementation of your idea – they want to help turn it into a viable business model and are ready to provide the necessary funds to do so. Often, such incubators and accelerators offer space in their office, so as to make it more convenient to collaborate on a project. Since other startups work in the same space, you get the opportunity to exchange ideas and find non-standard ways of solving problems. Find the nearest business incubator or check this one – InBIA. Startup accelerators, such as 500Startups, Ycombinator and TechStars, offer advice, small start-up capital and access to other investors in their network.

Social Networks of Professionals

Everyone knows the social network LinkedIn, where you can still find investors. In addition to it, there are many professional networks where you can cross paths with potential sponsors in your industry. Many of these sites are even ready to connect you with institutional investors from other countries who wish to join the global business space, and even ready to deliver your products to their country. Among such social networks should be noted EFactor, Startup Nation, Xing, Cofoundr and Meetup.

Direct Investment Market

Sometimes it’s safest to take the long route and contact a private equity firm. Moreover, the volume of these investments can be from several thousand to millions - depending on the potential that they see in your project. The goal of such companies in this case is to sell their share several years after investing and thus to profit from the development of a startup. According to data from the Private Equity Network, direct investment companies have invested $ 347 million in 2100 companies over the year.

Online Loan Platforms

The increasingly stringent restrictions on obtaining bank loans lead to the fact that for a startup it is much easier to raise funds from alternative sources – for example, via online platforms that perform the same functions as banks. These can be P2P sites, unconventional funds or large investors willing to help small businesses and make a profit on the terms of the loan. Among the well-proven platforms are Ondeck, Prosper and Lending Club.

(Video) How To Pitch a Real Estate Deal - Investment Memo Basics

Doing the Marketing Yourself

Without marketing, commercial success is impossible. On the other hand, successful marketing, if you do it yourself and make it a part of your personal brand, will not only save you money early on but will also attract serious investors. You should position yourself on a personal website, on social networks, in guest posts on authoritative blogs, in Quora communication and in traditional media as well.

Friends and Family

It can be quite simple to find an investor in one of your friends or relatives, since these people have known you for a long time and believe in you. The most consistent and passionate support usually comes from a close circle of friends. Just remember that, using this channel of help, you need to separate personal and professional communication. To do this, record all the conditions and be sure to voice the possible risks. Make sure that people close to you understand they can lose their money. Try not to risk the loss of loved ones or friends due to investments.

Don’t be disappointed if you don’t receive interesting offers from investors or if you are flatly refused, even several times in a row. All this simply means that you haven’t yet found an investor who fully complements your goals and needs. Try again and again until you find your ideal match.

“An offering memorandum is a legal document that states the objectives, risks and terms of an investment involved with a private placement.” Find out more details here.

How to present your offering memorandum to the investor you’ll discover below.

Why Does Your Startup Need a Pitch Deck?

Your main goal is to start a conversation. Your pitch deck is designed to evoke curiosity, attract the attention of investors and let them know more about you.

The key to doing this is to give the potential investors enough detail to enrich their vision, turning it into something tangible, rather than overwhelm them with data.

(Video) Private Placement Memorandum I Everything to Know!

Deck Requirements

Your pitch must meet the following requirements:

  • Be able to stand on its own. Although you don’t want to include ideas and numbers that are not relevant to the present, these should be at the heart of your business. You should not remove the appendices and other resources to convey what the investor wants to hear.
  • Concise. Investors are very busy. Keep it to between 10 and 13 slides.
  • Accurate. If estimates are made (market size, customer demand, estimated management costs, etc.), they should be conservative. If you expand the numbers, it will be somewhat strange when those numbers don’t match up.

Mind the Timing

Keeping within the allotted time frame can be very difficult. Regardless of the format, be it 7, 5, 3, or even 2 minutes, you will need to train so as not to go beyond it. Seven minutes may seem like a lot, but even with such a generous restriction it is extremely difficult to match the time frames. Try with a timer. If this is your first time, you may miss by 2 minutes. To prevent this error, you should run a presentation with a stopwatch many times on your own, honestly pronouncing every word out loud. The actual presentation takes more time than the training version, so you need to fit with a margin.

Outlining the project in 3-5 minutes is more difficult than it seems. And the most important thing is often at the end.

Keep Theses Simple

Don’t overload the presentation. People (and especially investors) are often prone to attention deficit disorder. No one can (and most importantly, doesn’t want to) focus on complex structures. The presentation should consist of simple theses. As you read long texts only in exceptional cases, people listen carefully only when they know in advance that there will be something interesting.

You have no time to evoke their interest, so keep it simple. What, who, why, how much. Question - answer, thesis - the second - the third. The presentation should be simple and clear.

Don't Read from Slides

There is nothing sadder than reading from a slide. Everything is already written there and your audience will read it. When reading from a slide, you aren’t looking at audience and will likely stray from the story line, speak monotonously and without passion and forget what else was on that slide. The slide and the story should complement each other. The text on the slide is there to allow you to look at it for a second, remember what the slide is about and talk about it without looking.

A slide helps listeners to cling to the context if they’ve become distracted and are just refocusing their attention again. Pictures, numbers – yes. But the text is not for you.

Don’t Make People Read

Nobody reads your slides. People look at pictures, but nobody reads texts if they are longer than three words or more than a few lines on the slide. Presentation slides should be much more concise than the story, otherwise you can throw them out. A few very short statements in large print. No literary bundles. Otherwise, there is no chance of anyone reading what you’ve written.

If you want to make them believe in your product, show them something real. An interactive prototype is a strong argument to attract the attention of the audience and demonstrate what your app is about. If you can share the first working model of the application (MVP), it dramatically increases the chances of winning the game.

(Video) Private Placements Memorandum (PPM) - easy explanation

Talk to people in the room

You know what your own product is and why it’s great, but they don’t. The most basic and unexpected things can be incomprehensible. An app for helping snowboarders is a guide to the slopes, or a guide to injury medicine, or an evacuation helicopter call button. Or does it help you communicate with friends, or an online store ... what is it? If the main leisure activity among the audience is not snowboarding but poker, you must explain very clearly all the basic fundamentals of the project, from scratch. In 3 minutes, of course. Focus more on what is interesting to a specific audience.

Investors don’t need your detailed list of features – they need monetisation, market estimation, promotion strategy and development plans, as well as a clear understanding of why someone will use it.

What is an Information Memorandum?

The information memorandum (IM), sometimes referred to as the offering memorandum, is a legal document provided by the company to potential investors to explain the objectives, risks and investment conditions around the funding round.

  • This includes management biographies, financial statements, company details and more to help investors learn more about future business and financial plans.
  • This is a short document with about 20 to 30 pages highlighting the most important aspects and opportunities offered by your investment.

When creating an IM, consider how investors will read it. They should be able to scan content pages and go immediately to the sections, subsections and even paragraphs that contain answers to their questions.

Simplicity is the Key to the Professional Offering Memorandum

Take a look at the advanced stages of development and define where you are right now:

  1. Letter from the Director
  2. Investment Highlights
  3. Executive summary
  4. Company history
  5. Expansion plan
  6. Market overview
  7. Key success indicators
  8. Risks
  9. Team (management team)
  10. Financial information
  11. Financial Requirements / Quotation
  12. Ambitions (long-term goals)
  13. Other information

All this may take a few weeks to work. But no matter what stage you’re at, it takes a lot of time to raise investment funds.

Prepare investment promotion and investment memos, answer investor questions and demands and prepare yourself for the countless obstacles of time and energy-consuming activities.

(Video) Preparation of Information Memorandum and Pitch Book


How do you convince someone to invest in your project? ›

Here, you'll find 12 helpful tips for attracting and engaging the investment your new business needs.
  1. Work on extending your network. ...
  2. Show evidence. ...
  3. Personalize your pitch. ...
  4. Choose co-founders wisely. ...
  5. Refine your business first. ...
  6. Build a strong brand online. ...
  7. Think outside the box when it comes to investors.
26 Jul 2021

What should be included in an investment memorandum? ›

Investor memorandums typically include details on the business structure, financial risk and health and other important details. These details help an investor determine whether the risk is acceptable for potential gains from the business.

How do you reject an investment proposal? ›

Unfortunately, we have chosen not to move forward with your proposal at this time. Though your proposal is impressive, we are unable to fit your work into our budget. We wish you the best with your future endeavors and hope for the chance to work with each other in the future.

How do you write a good information memo? ›

The core sections of an IM include:
  1. Description of the market that the business is operating in, or planning to operate in.
  2. Brief history of the business covering the key development milestones.
  3. Description of the goods and services that the business is delivering into that market.
  4. Description of the management team.
28 Apr 2021

What to say to convince investors? ›

Talking to Investors
  1. Discuss Your Product or Service in Terms of Market Needs. Some companies make the mistake of focusing on the size of the market. ...
  2. Recognize the Competition. ...
  3. Explain Why an Investor is Important to Your Company. ...
  4. Have a Concise Pitch. ...
  5. Look at Companies That Excel at Talking to Investors.
28 Apr 2017

How do you encourage someone to invest in your business? ›

How to Convince People to Invest In Your Startup
  1. Do the thing you say you're going to do. ...
  2. Start small — trivially small — and then build up. ...
  3. Make three people love you. ...
  4. Ask for advice, not money. ...
  5. Be authentic. ...
  6. Consider an equity crowdfunding campaign when the time is right. ...
  7. Leverage the 'social proof' from crowdfunding.
29 Jun 2016

What are the 3 basic parts of a memorandum? ›

Most longer memos consist of an introduction, a discussion, and a conclusion. In the introduction, tell readers what prompted you to write (such as a problem or question about a specific procedure or policy), and provide any necessary background information.

What are the 7 parts of memorandum? ›

Standard memos are divided into segments to organize the information and to help achieve the writer's purpose.
  • Heading Segment. The heading segment follows this general format: ...
  • Opening Segment. ...
  • Context. ...
  • Task Segment. ...
  • Summary Segment. ...
  • Discussion Segments. ...
  • Closing Segment. ...
  • Necessary Attachments.

What are the 4 important investment considerations? ›

Four considerations when choosing an investment
  • Know why you are investing. There are many reasons why people choose to invest their hard-earned money. ...
  • Know your investment time horizon. ...
  • Know the costs. ...
  • Understand the unit trust funds.
19 Sept 2016

How do you politely decline investment opportunity? ›

At the moment, we're going to pass on the opportunity but we'd love to continue to monitor [redacted] and stay in touch to see how it further develops.” “I had a chance to play with the app and show/discuss it with the rest of the team, and we have decided to respectfully pass on an investment at this point.”

How do you politely reject a project offer? ›

  1. Offer Specific Reasons. Once you've made the decision to turn down a project, it's important to let the rejected client know specifically why you can't or won't do the project, but keep your explanation short and simple. ...
  2. Be Professional. ...
  3. Be Firm. ...
  4. Refer to Someone Else.

How do you politely decline an interest? ›

After much consideration, I have decided to pursue another role that will offer me more opportunities to pursue my interests in [insert interest] and [insert interest].” “Unfortunately, I have decided not to accept the position, as it isn't a good fit for me at this time.”

What is memo give an example of it? ›

A memo, short for memorandum, is a way to inform a group of people about a specific problem, solution, or event. A memo should be brief, straightforward, and easy to read. It informs recipients and provides an action plan with specific next steps. You may send a memo as a paper letter, fax, or PDF attached to an email.

What is an investment information memorandum? ›

What Is an Information Memorandum? An Information Memorandum, or a Product Disclosure Statement (PDS), provides a descriptive snapshot of your business' history, current status and projected future position. This document's primary purpose is to motivate potential investors to invest in your business.

What are the most important features of a successful memo? ›

Memos are characterized by being brief, direct, and easy to navigate. They are less formal than letters but should maintain a professional, succinct style. Often, the purpose of a business memo is twofold: to identify a problem and propose a solution. Other times, memos may provide or request factual information.

How do you write an investment message? ›

Keep your letter brief.

The first paragraph should establish your credibility within the industry as well as the other members of your team as assets that can aid in your success. Your second paragraph should lay out your plan to use the funding and what each investors can provide to the business.

How do you write a proposal to attract investors? ›

Beyond the typical sections, here are the most important things that investors want to see in your plan.
  1. A vision for the future. ...
  2. Product/market fit and traction. ...
  3. Funding needed and use of funds. ...
  4. A strong management team. ...
  5. An exit strategy. ...
  6. Cover letter. ...
  7. Pitch deck. ...
  8. Executive summary and/or Lean Plan.

What motivates people to invest? ›

Investors are motivated by the potential for quick profits, but they also want to see that a company can expand its product line and revenue streams for enhanced future returns.

How do you convince the investor to invest in private equity? ›

10 Ways to Attract Private Equity
  1. Audit Your Financials. Sloppy numbers sap value like a poorly tuned engine saps horsepower. ...
  2. Fill Gaps in Your Team. ...
  3. Diversify Your Customer Base. ...
  4. Create an Exit Plan. ...
  5. Solidify Your Contracts. ...
  6. Build the Product Pipeline. ...
  7. Get a Realistic Valuation. ...
  8. Make an Acquisition.
9 Mar 2016

What are the 4 words used in the memorandum heading? ›

The four standard headings for memos are TO:, FROM:, DATE:, and SUBJECT: (or Re:, short for Regarding).

What is the most important part of a memorandum? ›

Body Section

The most important section in memos is the body. Basically, the body has four main parts: introduction, statement of facts, argument, and conclusion.

What are the four 4 types of memorandum? ›

There is a standard format for all memos, but there are four different types of memos based on their other purposes. Those memos are the response memo, meeting minutes memo, status memo, and field report memo.

What is the basic format of memorandum? ›

The format of a memo follows the general guidelines of business writing. A memo is usually a page or two long, single spaced and left justified. Instead of using indentations to show new paragraphs, skip a line between sentences. Business materials should be concise and easy to read.

What is the first thing you do in writing a memo? ›

Begin the memo with a sentence that describes the reason you are writing. It should be very short — about one or two sentences. The introduction should clearly state the purpose of the memo so the reader immediately understands what it is about.

What are the 3 main objectives of every investment? ›

Safety, income, and capital gains are the big three objectives of investing. But there are others that should be kept in mind when they choose investments.

What are 4 common investment mistakes? ›

  • Buying high and selling low. ...
  • Trading too much and too often. ...
  • Paying too much in fees and commissions. ...
  • Focusing too much on taxes. ...
  • Expecting too much or using someone else's expectations. ...
  • Not having clear investment goals. ...
  • Failing to diversify enough. ...
  • Focusing on the wrong kind of performance.

How do you reject something professionally? ›

How to politely decline a job offer
  1. Make sure you want to decline the offer. ...
  2. Show appreciation and gratitude. ...
  3. Keep the networking door open. ...
  4. Explain your decision. ...
  5. If the offer doesn't help you achieve your career goals. ...
  6. If you're interested in the company — but not the role. ...
  7. If you've accepted a better offer.

How do you professionally decline something? ›

Be straightforward about the future. If you don't want to leave the door open for a next ask, be clear. State your reason and then stop talking. Say: “I appreciate your request but I have other priorities and can't take on the extra work.”

How do you positively decline a request? ›

How to politely decline
  1. Apologize first. This might seem like an odd piece of advice, especially if you objectively haven't done anything wrong. ...
  2. Don't beat around the bush. ...
  3. Use the actual word. ...
  4. Say NO twice, if you have to. ...
  5. Forward them to someone else. ...
  6. Mirror their request. ...
  7. Offer an alternative. ...
  8. Get back to them.

How do you pull out of a project? ›

Here are nine do's and don'ts when saying no at work.
  1. Do tell the person you'll get back to them. ...
  2. Do look at the big picture. ...
  3. Do highlight the value of your work and of your time. ...
  4. Do be assertive and confident. ...
  5. Do pick your battles. ...
  6. Don't whine about having too much work.
29 Jan 2018

How do you say you are not interested in project? ›

Dillon recommends describing your workload and the “projects on your plate” by saying something like, “I would be unable to do a good a job on your project and my other work would suffer.” To maintain a good relationship with the person you're turning down, it's critical to “acknowledge the other side,” says Weeks.

How do you say no professionally? ›

Use these examples to politely say "no" to your employer and coworkers:
  1. "Unfortunately, I have too much to do today. ...
  2. "I'm flattered by your offer, but no thank you."
  3. "That sounds fun, but I have a lot going on at home."
  4. "I'm not comfortable doing that task. ...
  5. "Now isn't a good time for me.

How do you start a memorandum? ›

In the first paragraph, you'll want to quickly and clearly state the purpose of your memo. You might begin your sentence with the phrase, "I'm writing to inform you … " or "I'm writing to request ... ". A memo is meant to be short, clear, and to the point.

What is purpose of memorandum? ›

A memorandum (memo) is used to communicate something of immediate importance to people within a business or organization. A memo also can be sent to people or firms that have close or long-standing relationships, such as vendors or consultants. Like a business letter, a memo is a permanent record of your communication.

What are the three most common types of memos? ›

Some of the different types of memos are:
  • Request Memo. The objective of these types of memos is to gain a favorable response to a request. ...
  • Confirmation Memo. These memos are used to confirm in writing something that has been agreed to verbally. ...
  • Suggestive Memo.
20 Oct 2020

What is key information memorandum? ›

This Key Information Memorandum (KIM) sets forth the information, which a prospective. investor ought to know before investing. For further details of the scheme/Mutual Fund, due. diligence certificate by the AMC, Key Personnel, investors' rights & services, risk factors, penalties & pending litigations etc.

What are three sources of investment information? ›

To make those decisions, you need information that will help you form an idea of the economy, industry, and company that affect your decisions. The three main kinds of information that investors use are economic indicators, market indexes, and company performance.

How do you write a financial memorandum? ›

How to Write a Memo
  1. Add the Title. A memo's title is short and to the point, and is always placed at the top of the page. ...
  2. Make Sure to Include the Date. ...
  3. Designate Who Receives Memo With "To" ...
  4. Make Clear Who the Memo Is "From" ...
  5. Add a Clear Subject. ...
  6. Write the Body. ...
  7. Sign Off With a Good Close.
10 Dec 2018

What are the two purpose of memorandum? ›

Memos have a twofold purpose: they bring attention to problems, and they solve problems. They accomplish their goals by informing the reader about new information like policy changes, price increases, or by persuading the reader to take an action, such as attend a meeting, or change a current production procedure.

How do you ask someone to invest? ›

How to ask your family and friends to invest in your business?
  1. Be professional. ...
  2. Be honest. ...
  3. Make them aware of the risk to avoid misunderstandings. ...
  4. Ask for the minimum and not the maximum. ...
  5. Have a solid business plan. ...
  6. Honor your commitments. ...
  7. Provide regular updates.

How do you convince someone to invest in stocks? ›

5 Tips To Convince Your Partner To Start Investing
  1. Invest with smaller amounts.
  2. Benefit of liquidity.
  3. Power of compounding.
  4. Benefits of dividend.
  5. Versatility.
  6. Conclusion.
15 Feb 2022

How do you write a letter asking for an investment? ›

Write Your Letter Step-by-Step
  1. Write Your Letter Step-by-Step. ...
  2. Tell about your company or organization. ...
  3. Explain that you are looking for investors and why. ...
  4. Ask your reader to invest in your company. ...
  5. Offer your reader all the current information about your company that you can.

How do you start a conversation with an investment client? ›

I landed a short meeting with a potential investor thanks to a warm introduction. Where do I start the conversation?
  1. Get to Know Them. ...
  2. Be Clear and Concise. ...
  3. Start With Background. ...
  4. Sell Your Method, Not Your Product. ...
  5. Ask Questions to Build Trust. ...
  6. Discuss the Person Who Made the Introduction. ...
  7. Find Out What Caught Their Eye.
21 Oct 2015

How do you write an investment proposal? ›

An investment proposal should include the following preliminary information:
  1. Brief description of project.
  2. Sponsorship, management & technical assistance:
  3. Market & sales:
  4. Technical feasibility, manpower, raw material resources & environment:
  5. Investment requirements, project financing, and returns:

How do you convince someone for money? ›

Here are seven persuasive tactics you can use to get what you want from anyone.
  1. Be confident. ...
  2. Introduce a logical argument. ...
  3. Make it seem beneficial to the other party. ...
  4. Choose your words carefully. ...
  5. Use flattery. ...
  6. Be patient, but persistent.
16 Jul 2016


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2. Zagga | How To Get the Most Out of Our Investment Memorandum (IM)
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3. Investment Memorandum: description and main sections. [Goldfinch Finance: Module 5]
(Крипто Dad)
4. Working with Partners : Memorandum of Understanding
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5. Sunday Sessions 022 : Preparing An Information Memorandum
(Property Developer Network)
6. Offering Memorandum Template
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