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    6 Replies Latest reply on Oct 15, 2008 10:22 AM by rwiethop

    What is an investment memo?

    CaptCole Newbie
      Hi, Capt Cole with LL. A possible investor is looking for an ivestment memo. Can anyone help me out with content and format of an "investment memo"?

      Capt Cole
        • Re: What is an investment memo?
          NoBullFunding Scout
          It's a summary of your investment. More or less how its going to work, how they'll be compensated, financial projections etc. Kind like a business plan. I did a quick search and found an example for you: http://waifsofwar.org/PDF/Investment%20Memo%20-%20WoW%20Seabass%20Sept2004.pdf
          • Re: What is an investment memo?
            GrowthCurve Adventurer
            I have never heard of an investment "memo" before, but I have heard of an investment "memorandum."

            Any chance that is what he meant?

            If so, an investment memorandum is pretty much like a business plan, only it's specifically written with an eye towards securing investors, whereas a business plan can be written without this purpose.
            • Re: What is an investment memo?
              Lighthouse24 Ranger

              I'd think if a potential investor is asking you for an investment memo, he has reviewed the plan and is ready to commit. If that's the case, he wants a term sheet that would spell out (as applicable) the:
              • Investment amount

               

              • Type of security being purchased

               

              • Pre- and post-financing values of the company

               

              • Definitions and assumptions

               

              • Rights, preferences, privileges, restrictions, and obligations

               

              • Board of Directors

               

              • Representations and warranties

               

              • Covenants

               

              • Remedial action clauses

               

              • Agreements with founders and key management.

              In the investment cycle, signing an investment memo or term sheet generally comes after a review of the business plan and an informal agreement that you both potentially have something to gain. After it's signed, you both proceed with in-depth due-diligence and prepare all of the actual legal documents for signature that will be needed to secure funding. It's sort of like an engagement ring -- it signals a serious commitment, but either of you can still call the deal off without legal action.

              Hope that helps. Best wishes.
              • Re: What is an investment memo?
                token88 Newbie

                what type of investment is he looking for? Real estate, oil & gas(High Risk) pre ipo, what is his comfort level. Has he done private placements before? I've sold private placements before I was lucky to find good projects, but there are a lot of scams out there, the one I would advise anyone to stay away from is "high yield investment programs" If anyone approaches you to get involved turn and run for the hills. If there are question you or your friend have send me an email alexconsultinggroup@gmail.com
                • Re: What is an investment memo?
                  rwiethop Newbie
                  In my experience, an investor is not going to ask you for an investment memo. This is also sometimes call a PPM (Private Placement Memorandum). If this person is a true investor and interested in your project, he/she will guide you in what exactly they need from you. The PPM or "investment memo" is something that you should put together as an offering. This and several other documents should be put together with a full business plan, executive summary and ROI (Return On Invetment) projection. I have been dealing with these type of things for a long time now and had to learn the hard way. Don't make the same mistakes I did.

                  If you would like to contact me on exactly what you need, please do so: rwiethop@wiethopenterprises.com.

                  I am not a broker or trying to charge for anything. I'm just trying to help. I can give you examples of what you would need and what an investor is looking for.

                  Remember, anyone that just shows up and says they'll invest without any documentation first or asks for a PPM, it's a scam.