Private Placement Memorandums A term sheet for investment execution.
Private Placement Memorandums
Raising capital for your business in a way that follows the Rules of the SEC falls into one of two buckets: a “public offering” or a “private exempt offering.” In the 1930’s Congress passed the 1933 Securities Act, which is still the law today. Failure to comply with this law can be very dangerous legally.
The public offering bucket is for offerings are typically sold by Broker/Dealers who are licensed to sell them. The private offering bucket allows a company to sell stock or securities to individuals under an exemption to the public offering rules. The exemption used for most private offerings is described in an SEC regulation popularly called “Reg. D.” Reg. D requires that the company that is selling its stock or other security comply with some special rules, and also defines what type of people can invest. Lawyers who work in this area create documents that help the company and its founders to comply with all of the SEC rules and regulations. A Private Placement Memorandum, or “PPM” for short, is a special document that is created to allow the company to provide the proper information to qualified investors and also allows the investors to get important information from the company before investing. Our team has experienced SEC attorneys who can help you with your PPM.