Chapter 03

The information memorandum

The memorandum is the document that turns interest into a conversation. It has one job: to let a serious candidate decide whether the business is worth their time, without handing away what makes it work.

Structure that works

1. A summary of what the business does and what is being offered
2. The market and where the business sits in it
3. Products, suppliers and margins per group
4. Channels: search, advertising, marketplaces, email, partnerships
5. Operations: order handling, stock, returns, service
6. Financial history, normalised and explained
7. The team, and what happens to it after a transfer
8. The reason for sale, stated plainly
9. The structure that is envisaged and the terms that are open

Tone

A memorandum that reads like an advertisement invites suspicion. A memorandum that reads like a technical report loses the reader in the second chapter. The register that works sits between the two: descriptive, specific and open about weak points.

Naming a weakness early is not a concession. It removes the surprise from due diligence, and it makes every other claim in the document more credible.

What stays out

Supplier names, customer lists, exact search terms driving traffic and the details of any pending negotiation belong in a later stage. So do employment contracts and anything that identifies staff.

A useful test: if a document leaking to a competitor would cause real damage, it does not belong in a memorandum that is sent out to a dozen parties.

The advertisement is not the memorandum

A public listing describes the business in a few lines, without naming it. Its purpose is to attract enquiries, not to inform. The memorandum follows only after a non-disclosure agreement is in place and the candidate has been checked.

Writing both from the same source material keeps the two consistent, which matters more than it sounds. Candidates compare them line by line.

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