An investor decides whether to take you seriously long before they decide whether to invest. Usually it happens in the first ten minutes with your documents, and usually you are not in the room.
Founders tend to treat the information memorandum as the thing you produce once the interesting work is done. It is the other way round. The pack is the first and often the only evidence an investor has about how the business is run. They cannot audit your operations from a first meeting. They can read your documents, and they will judge the operation by them.
Here is what they are actually looking at.
Does the use of funds reconcile?
The first test is arithmetic. If you are raising £3m, the pack should show where £3m goes, and the total should be £3m. Not £2.8m with a rounding gap, not £3.4m because the figures were written at different times.
This sounds trivial. It is the single most common failure I see, and it is the most damaging, because an investor who finds one arithmetic error stops reading for meaning and starts reading for more errors. The document has changed from a proposition into an audit.
Check that every number appearing in more than one place is the same number in both.
What happens if it goes wrong?
Weak packs describe the upside in detail and handle the downside with a paragraph about market risk. Strong packs answer a specific question: if the plan slips by six months, what happens to the investor?
For a debt instrument that means the security, who ranks where, what the default provisions are, and what the enforcement route actually looks like in practice rather than on paper. For equity it means dilution, the terms of the next round, and what governance the investor gets.
Being straight about the downside does not weaken the pitch. It is the strongest available signal that the rest of the document is honest.
Is the structure explained, or just named?
Many packs say “secured loan note” and move on. That is a label, not an explanation.
Secured against what, valued by whom, and when? Who holds the security, and on whose behalf? Is there a trustee? What is the priority if there is existing debt? An investor reading carefully wants the chain from their money to the asset, with each link named.
Where that chain has a gap, they assume the worst about the gap. Often the security is perfectly sound and nobody wrote it down properly.
Do the projections show their working?
A five-year model with revenue rising smoothly and no stated assumptions is worth nothing. Nobody believes the number; they want to see what it rests on.
State the assumptions plainly — unit economics, conversion rates, headcount, pricing, timing — and show what happens when the important ones move. A model that survives a downside case is more persuasive than one that only works in the base case, because it demonstrates the founder has already thought about being wrong.
Is it consistent with everything else?
Investors read the pack alongside your filings, your website, your LinkedIn and whatever else is public. Contradictions between those surface fast, and they are expensive.
Directors listed in the pack who are not at Companies House. A team page showing people who left. Revenue in the deck that does not sit with the last filed accounts. Each is individually explainable. Together they say nobody checked.
Before you send anything, read the pack as though you were trying to catch yourself out, with the public record open beside it.
The underlying point
None of this is about polish. Expensive design does not fix a use of funds that does not add up, and a plain document with sound numbers and a clearly explained structure will outperform a beautiful one without them.
The pack is not marketing for the raise. It is the first evidence of how the business handles detail, and investors read it that way whether or not it was written that way.
Get it right before outreach starts. Fixing it halfway through a raise means going back to people who have already formed a view.
Related reading
- What goes in an information memorandum
- The seven documents investors ask for in diligence
- How long does it take to raise capital?
Mark Johnson is a Director of BDM Wealth Management, which introduces capital raising opportunities across bonds, loan notes, IPOs and SEIS/EIS. To discuss a raise, get in touch.
BDM Wealth Management is an introduction business and is not regulated. This article is general information, not financial, tax or legal advice, and does not constitute an offer or invitation to invest. Capital is at risk and you may get back less than you invest. For high-net-worth and sophisticated investors only. Take independent professional advice before making any investment decision.