A Confidential Information Memorandum (CIM) is the detailed marketing document a broker or intermediary prepares to sell a business. It covers operations, history, financials, customers, staff, and growth "opportunities," and is released to vetted buyers after they sign an NDA. It is the primary information source before you submit an IOI or LOI.
What to trust, and verify
| CIM section | Verify with |
|---|---|
| Adjusted SDE / add-backs | QoE, tax returns |
| Customer base | Concentration analysis |
| "Growth opportunities" | Your own diligence, treat as marketing |
The CIM's financials are the seller's version. Every number in it is a claim to be checked, not a fact.
Why it matters when buying a business
The CIM shapes your first offer, so reading it critically protects you from overpaying. Its add-backs and projections are optimistic by design; the growth "upside" is usually the seller's pitch, not a promise. Use it to build questions for diligence, then confirm everything before the LOI price is firm.
