Venture Capital Database 2014 Now Available
Private Placement Memorandum
Sample Private Placement Memorandum (PPM) For Sale
A Private Placement is an extremely complex document. The primary purpose of a PPM is to give the entrepreneur the opportunity to present all potential risks to the investor. The PPM protects the entrepreneur in the event that the investment goes sour! That's why it's so important that the private placement memorandum be accurate and complete.
An attorney MUST review your offering to assure it complies with all national and state regulations. The Private Placement below is meant as a starting point for groups or individuals who want to piece together a PPM themselves, save some money and then take it to the attorney for review. An attorney must review your PPM to assure compliance with your state's securities laws. Failure to do so could cause some serious problems down the road, especially when approaching an initial public offering!
This is a very detailed, 70+ page Private Placement Memorandum (PPM which includes a sample engagement letter, investment bank term sheet, due diligence checklist, sample private placement memorandum and the subscription agreement! Everything your company needs to issue stock in accordance with the Securities and Exchange Commission. Details the summary of the offering, financial data, industry overview, management, etc.
There are several
ways in which companies approach the creation of a PPM.
- Attorneys. Many firms simply retain an attorney to prepare the PPM. Once complete, the management team is responsible for soliciting and pitching potential new investors. The only fees incurred are those of the attorney and the time of the management team. Attorneys will charge from $5000 to $20000 for a full private placement. An attorney may be a good route for companies that already have a well established network of possible investors to pitch the investment opportunity.
- Investment Banks. Other firms hire an intermediary (investment bank) to help with the capital raise. Hiring an intermediary can be tricky. An entrepreneur will encounter all sorts of institutions offering all sorts of different promises to raise money for the start-up. The decisions and processes can be very confusing and time-consuming. For many start-ups a wrong decision will KILL the company. There are all sorts of negotiations involved when retaining an investment bank, and there many different types of investment banks. As the entrepreneur YOU must be at the top of your game or you will get the short end of the stick!
- PPM Specialists. Firms specializing in this arena are often a hybrid cross between legal counsel and an investment bank
The PPMs offered for sale below is a starting point for all entrepreneurs and management teams considering the possibility of raising capital via a Private Placement. The documents were prepared by a highly reputable legal firm in conjunction with the efforts of management.
Private Placement Memorandum (Shares of Stock)