Do Investors Have Money ?

Given the current economic turmoil I advise you to closely ask any potential investor in a project what their available capital is.

There are many venture capital and private equity managers that are still in business, and interested in reviewing things, but when push comes to shove they do not have the capital.

Recently LCC had a series of meetings with a well known PE manager in Australia.  After some weeks, however, we learned that the investor had enough money to pay their fees, but little else.  Additionally the planned new fund that that manager had for 2009 was put on ice.

So early in any discussion make sure you are aware of the investments that the party you are holding discussions with have made, and additionally what their free cash for each investment is.

Using Skeleton Documents

When preparing an information memorandum a simple but useful tip is to prepare a rigorous index to the document ahead of any full scale drafting.

Nothing is more annoying than rewriting documents over and over again.  Working through an index approach you can ensure that the framework of the document is put in good order and all stakeholders that are involved in the process can buy in.  THis will avoid lengthy redrafts (hopefully).

Using an index based framework approach will also give you direction in the preparation of the documentation.  You can work on a modular basis.

Indexes and substance to Information Memoranda are fairly standardised these days.  Any public company prospectus will give you good direction on the sections that a investor will seek to review.

You can also visit the resources section of our website :  www.lcc.asia for many useful tools in preparing an information memoranda.