A Private Placement Memorandum is required of companies and hedge funds to help them raise capital. The private placement memorandum’s primary purpose is to disclose to the prospective investors all or the necessary information about the company and the transaction. Years ago business owners were beholden to law firms for the drafting of a private placement memorandum. Today, the business owners have other sources to which they can go to for the drafting of a private placement memorandum.
Reg D is an exemption under securities law that allows for companies to raise capital from private investors; think of it like a private IPO. Companies can raise from $100,000 to $10 million of debt, equity, or preferred stock.
Information about your company, and the transaction at hand is all communicated through the private placement memorandum. This document helps prospective investors understand the nature of your business, as well as the risk involved. There are several web-based firms that provide Private Placement Memorandum Templates to help companies navigate the documentation process.
A reg d offering, or private placement can be run by a company of any size, from a start-up to a mature $100 million revenue business. These offerings can also be done by a C-Corp, S-Corp, or LLC (note that there are some restrictions for the classes of securities that an S-corp can issue).
Companies such as TransCapital Pro help business owners save money and hedge against busted deal costs by offering private placement memorandum templates for a fraction of the cost of an attorney-written document. If you choose to go the route of writing your own private placement memorandum o your own, it is a great idea to have your attorney review and comment on your document before you hit the street.
Private Placement Memorandum Templates for reg d private offerings, private equity funds and real estate funds.