What is a Confidential Information Memorandum (CIM)?

Erik Sullivan

Sellers Seller Articles Seller FAQ

“What is a Confidential Information Memorandum (CIM) and why is it important?"

We all know how important first impressions are. During the process of selling your business, the CIM is one of the first documents a buyer will receive.  

If you don’t know how to spot a good CIM, you may end up getting a five-page write-up that leaves buyers with a bad impression.

After more than 20 years and over a thousand CIMs written, we've learned there is a direct correlation between the quality of the CIM and the ability to find the right buyer for your business. 

In this article, we will explain the purpose of a CIM, what should be included, what should not be included, and how to make sure you give yourself the best possible chance to make a great first impression. 

Let’s begin.

What is a CIM?

A confidential information memorandum, otherwise known as the "CIM", is a comprehensive marketing document that summarizes your business. It highlights the benefits of owning your company and allows a buyer to determine if they’d like to own your business.

There are a ridiculous amount of names for a CIM, including:

  • confidential business review (CBR)
  • marketing book, or “the Book”
  • offering memorandum (OM)
  • information memorandum (IM)
  • selling memorandum
  • selling prospectus
  • business summary
  • The Pitch Deck
  • The Pitch Book

Word bubble of the different names for a confidential information memorandum

The Purpose of a Confidential Information Memorandum

CIMs serve several purposes. They: 

  • Share preliminary financial information
  • Highlight the attractive features of your business
  • Show your company’s growth potential
  • Entice buyers to increase their bids
  • Satisfy many initial bank information requests in advance

Once buyers review the marketing document, your business broker or M&A advisor can more easily weed out who is interested in moving forward and who is not.

What Information Is Included in a CIM?

If your business broker or M&A Advisor delivers a CIM to you that covers all of these points, it’s a good sign:

  • Price and terms
  • Highlights of the company
  • Company summary 
  • Summary of the facility, property, and equipment 
  • Graphics and charts summarizing key financial metrics
  • Organization and responsibilities chart  
  • Overview of the competition
  • Growth opportunities
  • Licenses and certifications 
  • Market area and demographics 
  • Preliminary financial statements and adjustments 

Keep in mind, the quality of the CIM will depend on how in-depth your business broker or M&A Advisor goes within each section.

The best CIMs we've seen are from advisors that have sold several businesses in the same size range and industry as the business they are representing.

It's important to know what a buyer and lender will be looking for, then create excellent marketing materials that tell your story in a compelling way.  

Example Company Summary from a confidential information memorandum


A major benefit of a comprehensive marketing document lies in the time saved by mitigating the need for follow-up questions from buyers. A well-crafted Confidential Information Memorandum can also make it easier for a buyer to get financing from a lender to purchase your business.


What Should Not be Included in a CIM?

When creating a CIM, your advisor will aim to provide quality information to the buyer, while keeping certain details confidential until later in the process.

 Here are a few examples of items that should be left out: 

  • Tax returns 
  • List of customers/vendors
  • Employee names/contact information
  • Trade secrets 
  • Detailed profit and loss (P&L) statements

The key to protecting confidentiality lies in minimizing exposure to less-qualified buyer candidates. In other words, your advisor should have a very good screening process to determine who gets to see your CIM and who doesn't.  


After a buyer/seller meeting, we often find it useful to provide a "data pack" of information to the buyer. Doing so answers many follow-up questions ahead of time and should get them comfortable enough to make an offer. Items in the data pack might include a list of equipment, detailed P&Ls, and more.


How Long is a Confidential Information Memorandum?

A standard confidential information memorandum will be anywhere from 30 to 60 pages, depending on industry and business size. However, we've seen some as long as 150 pages and as short as two pages. 

Pages of a confidential information memorandum


Usually, the larger your business, the more detailed and lengthy your CIM will be.


When Should the CIM be Complete and Ready to Present to Buyers? 

The Confidential Information Memorandum will be included in your company’s marketing package. This marketing package is typically completed right before advertising your business. 

If the CIM is not completed before the listing goes live, it should be finalized at least within a week of your listing going live.

By having the CIM readily available at this stage, your advisor can easily send it to buyers after the formal buyer screening process. 

When Are Buyers Shown the Confidential Information Memorandum? 

At a bare minimum, a broker should have a buyer sign a non-disclosure agreement (NDA) before sending them the CIM or other confidential marketing materials. This will help the sale of the business remain confidential

Only serious and qualified buyers should be given access to the confidential information contained in your CIM. If word gets out that you are selling your small business, it may jeopardize your relationship with your employees or customers.

At MidStreet, we have buyers go through the following steps before sending any information: 

  • Phone interview 
  • Background questionnaire
  • Financial questionnaire
  • Proof of identity
  • Non-disclosure agreement


Unfortunately, we've heard horror stories of competitors and malicious parties posing as buyers to gain sensitive information about businesses. Requiring proof of identification (i.e. photo of a driver's license) mitigates this risk.

If you are thinking about selling your company, you should ask potential brokers, “At what point do you release a CIM to prospective buyers?” Their answer will tell you whether you’ll feel comfortable taking the next step with them or not. 

How Important is a Quality CIM to the Selling Process?

The quality of your marketing document can greatly impact the value of your business and the success of your sale. A great CIM can: 

  • Make your company attractive to buyers (and lenders)
  • Explain the operations of your business, allowing the interested parties to feel more comfortable  
  • Mitigate frustrating follow-up questions from buyers and free up your time
  • Positively affect the price you receive for your business  

How to Know You Have Received a Bad Confidential Information Memorandum

A quick way to tell you have a bad CIM in front of you is if it is less than five pages long.

A 1-5 page CIM will simply not be able to go as in-depth as it needs to, since at least 3 of the pages should be financials. 

In order to properly explain each facet of your company, the marketing document will need to be around 30-40 pages.

However, long CIMs aren’t always well made. A 30-40 page document may include filler information that adds no value, or simply rushed and incorrect statements and data. 

Another easy way to tell you have received a poorly made CIM is if it contains any of the things we mentioned that it should not contain (tax returns, customer lists, employee contact information, etc.). 

A poorly made CIM may also lack financial information. It should include profit and loss statements from the last three years. However, these should be presented in a way that gives the buyer a condensed overview and protects sensitive details of your financials. 

Sell Your Business Successfully With a Good CIM

Now that you know what information a confidential information memorandum should contain, how long it should be, and how to tell a good one from a bad one, you know what to expect from M&A advisors and their CIMs. 

When searching for an M&A firm to work with, ask them what information they include in CIMs, how long they are, and when they release them to buyers. 

If they tell you their average CIM is two pages long and includes employee names and contact information, run!

For information on how to choose a good business broker, check out our article “5 Tips to Find the Best Business Broker.” To find out more about how we create a CIM, contact us today. 

Know Your Company's Worth

Prepare to sell by determining the value of your business.


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