What is a Private Placement Memorandum?
A private placement memorandum is very useful for smaller businesses seeking investment. Often we hear of the larger companies “going public.” This going public reference is to a public offering in order to obtain investment capital. Of course, this investment is obtained on the public market. A private placement memorandum, however, allows one to obtain investment in the private arena.
However, one catch to a private placement memorandum is it only allows accredited and solicited individuals to participate in the offering. This is helpful to smaller businesses because it acts as a vetting stage for future owners that will join the company. Although a private placement memorandum is more relaxed than public offerings, they are still regulated by the 1933 Securities Act.
Regulation D of the Securities and Exchange Act exempts certain businesses from registering their securities with the Securities & Exchange Commission (SEC). Instead, they only need the information as required on Form D. In order to be exempt from registering securities, the investors sought must be through private means and must be considered “sophisticated” and/or “informed” investors. Documentation is required in order to ensure the investors meet this standard. We will draft the necessary documents to make sure you are not only able to obtain the investment needed but also do not violate any federal and/or state securities laws (“blue sky laws”).
Benefits of a Private Placement Memorandum
- Any business needing investment from sophisticated investors.
- Businesses with large investment needs.
- A private company seeking investments would need to draft these documents in order not to violate any federal or state laws.
How long does it take to complete a custom Private Placement Memorandum?
Approximately 5-7 business days*
*Depending on Specifications
Why SG Law Group to provide you a Private Placement Memorandum?
Private Placement Memorandum (PPM) are complex, involved a set of documents requiring a great deal of information from the company. Having experience with the information required, our Firm is able to guide you through the information gathering process as well as draft the final documents necessary to consummate the investment transaction. As a Firm that takes a personal approach with each and every one of their clients, we will ensure that you understand all the aspects of the PPM and are prepared to seek investment from your sophisticated investors.