Special post by David Buffaloe (President of Vertical IQ), featuring Van Daughtry (Founder of Van Daughtry Consulting LLC; President of CVBBA)
In the world of business brokerage and M&A, your first impression with a buyer often begins not with a handshake, but with a document: the confidential information memorandum (CIM).
For business brokers and advisors, a well-crafted CIM is much more than a summary of a business’s financials and operations. It’s a narrative tool, a trust-builder, and often the most important asset in educating prospective buyers. An effective CIM establishes value and drives a deal forward.
Yet, producing a successful CIM can sometimes be a time-consuming, complex task. It requires complex research, accurate data points, and in-depth analysis of a business, its industry, and its economic landscape.
I recently sat down for a candid conversation with Van Daughtry, a seasoned business broker and president of the Carolinas-Virginia Business Brokers Association (CVBBA), to discuss how the CIM comes together, why it matters, and how Industry Intelligence tools like Vertical IQ can streamline and strengthen the CIM development process.
The CIM: More than a document
A CIM is a comprehensive, confidential document about a business that’s for sale, shared with qualified buyers after signing an NDA. The CIM typically includes:
- Business overview and history
- Financial statements and analysis
- Market and competitive insights
- Management structure and personnel
- Growth opportunities and risk factors
According to Van, a CIM is essentially a “guided tour” through the business. “You want the buyer to be able to see themselves in the business, to imagine what running it might feel like,” he explains. “A strong CIM doesn’t just share data — it builds a story.” And for business brokers, business advisors, and M&A groups, the CIM can make or break a deal.
The CIM process: Consultative, strategic, and time-intensive
When working with a sell-side client, Van takes a consultative approach that begins well before he develops the CIM. He works with business owners to understand their motivations for selling, business health, and goals. Once the decision to sell is solidified, the valuation is completed, and the CIM process begins in earnest.
Brokers then compile everything from financials and demographics to competitive positioning and licensing needs. In Van’s practice, he often asks the business owner to write a one-page business summary: how they started the business, what they’ve learned, and where they see opportunity. “It personalizes the deal,” he observes.
The result is typically a 12- to 20-page document (though some stretch to 30+ pages), and the creation can take anywhere from a few hours to over 10, depending on the business’s complexity and organization.
Where Industry Intelligence elevates the CIM
The challenge? Sourcing reliable, relevant industry data and market insights to support the CIM’s story. That’s where Industry Intelligence platforms shine.
By integrating curated, industry-specific data directly into the CIM, business brokers can:
- Validate financials with industry benchmark comparisons
- Show growth potential using current trends and forecasts for the industry
- Educate buyers on key industry risks and opportunities
- Add local or regional context with local economic data
- Save hours of research time by utilizing trusted, timely, validated data
“When weighing the purchase of a business, prospective buyers understandably want to feel confident that they are going into the investment with their eyes wide open, so they usually have a lot of questions,” says Van. “Our goal is to help answer those questions up front, which removes barriers and builds confidence.”
Van also reminds us that it’s not just the buyer reviewing the CIM: Lenders are looking, too. Banks want to understand the industry before backing a deal. Industry Intelligence tools offer third-party validation that can put the credit risk manager’s mind at ease and help buyers secure financing more quickly.
Practical application: Section by section
While there isn’t a formal template that every CIM follows, there are certain sections that you’d expect to find within the document. Here’s how Industry Intelligence can map to typical CIM sections:
- Executive Summary: Use an Industry Overview and Industry Trends to build credibility and context.
- Market Analysis: In addition to Customer Insights, tap into Industry Risks, and Local Economic Data for added relevance.
- Financials: Use Financial Benchmarks to compare the business’s margins and cash flow against industry peers.
- Opportunities: Showcase emerging Industry Trends to highlight post-sale growth potential.
A human touch: Seller voice and simplicity
Van’s approach keeps the CIM focused — such as using concise language and clear analysis — and also relatable — like the one-page summary written by the buyer. “We aim for clarity, not flash. Buyers want the brass tacks.”
This mix of data, storytelling, and simplicity is what makes a CIM powerful and what keeps buyers engaged.
Educate to close the deal
Van sees the CIM as part of a broader strategy to educate and prepare buyers, which ultimately shortens the transaction cycle and improves outcomes. “The more informed a buyer is, the faster and cleaner the deal,” he notes.
With the upcoming 2025 CVBBA conference this month, this conversation with Van about developing more effective CIMs couldn’t be timelier. Whether you’re building your first CIM or refining your hundredth, incorporating credible Industry Intelligence, like you’ll find on Vertical IQ, can help you stand out in the marketplace, move sales faster, and close deals smarter.
Interested in seeing how Vertical IQ can support your next CIM? Visit us at www.verticaliq.com or stop by our booth at the CVBBA “Thrive in 25” conference in Cary, N.C. on September 23-25, 2025.
Special thanks to Van Daughtry, founder of Van Daughtry Consulting, LLC, for sharing his insights and experience as a business broker and consultant.
Main image: Pexels, Olia Danilevich