A Confidential Information Memorandum is the detailed document that presents a company to approved buyers after they have executed an NDA: history, operations, customers, financials, growth opportunities and reasons for sale. It follows an anonymous teaser and precedes management meetings. A good CIM is accurate, specific and honest about risks, and it does not include information a buyer only needs after an LOI.
Teaser first, then CIM
The teaser is a one-page anonymous summary sent before an NDA. The CIM is the full document sent after one. The sequence protects the seller: interest is tested before identity is revealed.
What a CIM contains
An executive summary, company history, products or services, market and competition, customers and concentration, operations and systems, team and organization, financial summary with normalized earnings, growth opportunities, the reason for sale, and the process instructions for submitting an offer.
The financial section should present normalized earnings with add-backs listed and explained. A buyer's quality-of-earnings team will test every line; the CIM should read as if it already has been.
What a good CIM leaves out
Customer names where identity is sensitive, detailed contracts, employee-level data, tax returns and bank statements, and anything the buyer only needs after an LOI. Those belong in the data room, released by stage. The CIM's job is to earn an offer, not to complete diligence.
It also leaves out spin. Buyers have read hundreds of these. A CIM that names its risks and explains them is trusted; one that hides them is discounted when they surface, and they always surface.
