Question 1

What is a private placement memorandum (PPM)?

Accepted Answer

PPMs are like the prospectus that is provided in a public offering. They are called for (but not required) when a seller decides to sell unregistered securities under an exemption. In other words, PPMs are used by business owners of privately held companies to attract a specific group of outside investors. These investors may be accredited or unaccredited, depending on the exemption used. There are several different capital-raising exemptions available including Regulation Crowdfunding (Section 4(a)(6)), Rule 506 of Regulation D, and Section 4(a)(2).

PPMs serve primarily as disclosure statements to investors and will balance the specific risks of an offering (compliance) with encouraging investors to invest (marketing).

Question 2

What is included in a private placement memorandum (PPM)?

Accepted Answer

While the disclosures included in a PPM will vary based on which exemption from registration is being used as well as target investors and terms of the offering, common elements of a PPM include:

●	Notices to investors - important notices such as no registration (use of exemption); no public market (it’s a private offering); restrictions on transfer of securities; right of the company to withdraw the offering; no legal, tax or business advice (investors must hire their own legal counsel or opt out of counsel and cannot rely on business’s counsel).
●	Executive summary - can include current market capitalization of the securities issuer; summary of the business and investment opportunity; risk factors; what types of investors may participate; material terms of the offering and securities.
●	Company purpose and overview - clear picture of business structure, strategy, and mission; information about target customers; description of company’s business operations and plans for the future; timelines for product development and other milestones and potential challenges; industry description including trends, dynamics, and regulations; description of internal organization including employee number and description. 
●	Terms of the offering and securities - describes the nature and terms of the securities being offered; minimum and maximum investment amounts; whether accredited and/or unaccredited investors may invest; voting, information, and liquidation rights; appropriate risk tolerance for this kind of investment; company plan for soliciting the securities; description of documentation investors will need to sign to invest.
●	Risk factors - risk factors generally fall into 3 categories: risks related to the specific company, risks related to the industry, and risks related to the offerings and securities being sold. This section should list the most significant risks first for each category.
●	Use of proceeds - use of proceeds will be detailed in a number of categories, including transaction expenses; party compensation agreements; expected financial results moving forward.
●	Financial information - provides a detailed description of the company’s financial status past, present, and future, including market capitalization; historical and pro forma financials; expected time to profitability; financial risks; management observations on past or present financial results including any declining metrics.
●	Management information - includes team member bios; particular skills or assets; past experience; wins and losses; compensation; conflicts of interest. 
●	Legal and tax matters - another opportunity to disclose and detail any legal and tax matters pertaining to the business, including contracts, litigation (threatened or pending), and tax liability and structures.
●	Exhibits - attached exhibits may include supporting materials such as the subscription agreement, instructions for investment, attorney disclosure form, operating agreement, W-9, investor questionnaire, material contracts, and governing documents like bylaws and certificate of incorporation. May include additional supporting documents.

Question 3

How do you file SEC form D?

Accepted Answer

Once a company has provided its PPM to investors, made a deal, and raised money, it must file an SEC Form D. A Form D filing notifies the SEC that a seller has made an exempt offering of securities - in other words, that they have made an offering of securities but that they haven&#x27;t registered these securities with the SEC. It must be filed in every state where investors reside within 15 days after the first sale of securities in the offering (if the due date falls on a weekend or holiday it is moved to the next business day). So for example, if money was raised from an investor in California, and one in New York, two Form Ds would need to be filed. But if both investors live in California, only one form must be filed.

Form Ds must be filed online using the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system. Failure to file may incur a penalty.

Private Placement Memorandum

PRIVATE PLACEMENT OFFERING MEMORANDUM OVERVIEW

PRIVATE PLACEMENT MEMORANDUM

OUR PORTFOLIO

SAMPLE BUSINESS PLANS

WHY VENTURE PLANS?

Seasoned

Accredited

Data-driven Analytics

Trusted

FEATURED SERVICES

AS FEATURED IN

TELL US MORE ABOUT YOUR PROJECT

Accredited

Completed Applications in 3 Days.

OUR CLIENTS' WORDS

PRIVATE PLACEMENT MEMORANDUM PROCESS

PPM Consultation

PPM Preparation and Document Collection

Review and Release

OUR TEAM

FAQS