Private placements are a great alternative for businesses to raise capital. Permitted under Regulation D, also known as Reg D, companies can seek capital from individual investors. These individual investors will typically need to meet the accredited investor requirements of Reg D.
Private placements can be used to raise debt or equity, and can be used for any number of purposes. Businesses have used private placements to raise capital for growth initiatives, acquisitions, and new business ventures.
The challenge for businesses is the traditional initial cost to prepare a private placement memorandum. These costs are typically $20,000 and can run as high as $40,000. The concern many businesses have is that these costs are incurred before they even begin the actual process of pitching prospective investors. The good news is that with the right template, businesses can write their own private placement memorandum and then have their attorney review for significant upfront cost savings.
See all of our Private Placement Templates