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Private Placements

 

Attorney Prepared Private Placement Memorandum

 

If you are looking to raise capital for your business, a private offering of securities might be the way for you to do it. Selling securities, whether it be to friends and family or angel investors, is an excellent means of raising capital if you are prepared to navigate the maze of state and federal laws and regulations involved.

There are many rules and laws to comply with when raising money in a private offering – so make sure to consult a private placement attorney / securities law attorney before you raise capital for your business.

Planning Every Aspect of Your Private Placement is Critical!

 

      • Determine the Right Structure for Your Private Placement

      • Prepared Private Offering Documents - PPMs and More.

      • Stay in Compliance with Federal / State Securities Regulations

      • How to Structure Your Private Placement

Coming up with the right structure for raising capital using a private placement can be a daunting task.  What do sophisticated investors looks for in a private placement?  Do you need to raise capital for growth?  Will you offer debt?  Is your private placement for equity?  Are you looking for seed capital?  All these things need to be considered when determining the structure your private offering.

Raising capital for your business using private placement requires more than just "selling stock."  A proper offering will include subscription documents, disclosure materials (typically in the form of a private placement memorandum or PPM), a note or other instrument for debt offerings, and revisions to organic corporate documents creating and authorizing any equity security to be offered.

Some Common Private Placement Documents

 

        • Private Placement Memorandum (PPM)

        • Term Sheet

        • Subscription Agreement

        • Corporate or LLC Resolutions

        • ByLaws or Operating Agreement

        • Stock or Unit Certificates

        • Form D

You should have a securities attorney's help when doing your PPM to guide you through the private placement & capital raising process. To save you time and money, we have listed below a few ways to reduce legal fees:

        1. Prepare a detailed business plan - in writing.  This reduces the time an attorney uses to learn about your business - which is crucial to the preparation of a good private placement memorandum.  A good portion of the business plan may also be used in the body of the PPM.

 

        2. Do research on securities laws so you know what questions to ask your attorney.  Your attorney will advise you of the legal restrictions involved in raising private capital using a private placement / PPM.  But, doing a little reading up front will let the attorney know you have some knowledge on this subject and that you are serious about raising capital.

Don't try to do this on your own.  An experienced private placement attorney can prepare all of the documents for you and make sure your private placement is properly documented.    You should retain the services of a private placement attorney to advise you through the entire private placement process.

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          The comments, statements and articles contained herein are general in nature and should not be relied upon as a basis for any legal opinion, action or conclusion on the part of the reader with respect to any particular set of facts or circumstances.  The content of this website is not intended to provide legal advice or to create an attorney client relationship.  We are licensed to practice law only in California and that this information is not intended to constitute legal advice of any kind or to constitute the practice of law in states other than California.

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