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PPM.net is one of the oldest and most respected private placement offering service firms on Wall Street. A private placement memorandum – also known as a “PPM”, is document used to sell securities to investors for their capital. The importance of writing a PPM shouldn’t be underestimated. A private placement memorandum is equally – if not more so – important than the company’s primary document, the business plan. The PPM contains vital information on the securities offering, including the stock or bond price, management information, financials, risk factors, securities rules, purchase and sell restrictions and much more. Our team at PPM.net has been assisting with drafting PPM for twenty years, encompassing such industries as diverse as space exploration, under water hotel development, various professional sports teams and of course standard PPM assistance from real estate offerings, hedge funds, offshore and onshore offerings, IPOs and most other offerings found in today’s financial world . Our team is 100% dedicated to the success of our clients. We never go over budget and always produce work earlier than agreed.
Importance of Writing or Drafting a Private Placement Memorandum?
The benefits of writing a private placement can be many. A PPM is first and foremost often required by regulation to give to investors. In addition, private placement documents can give added layer of protection to the entrepreneur. Outlining the risk factors and other pitfalls of a company is good for disclosure purposes. A PPM also looks professional to the investor, perhaps giving added confidence to the investment proposal.
Many states require the writing of a PPM or disclosure document when raising capital. In addition, federal guidelines mandate filing various form upon raising capital as well. Aside from US issuers, foreign companies mostly have similar requirements when selling securities, whether stocks or bonds, and require filing with their state or country securities agency. Each global jurisdiction has drafted its own regulations vis-a-vis selling securities to investors, and PPM.net is well versed in the vast majority of the world’s private placement markets. The importance of a properly structured and complaint private placement memorandum shouldn’t be underestimated. Hanging over an incomplete or non-complaint PPM to investors can be a deal breaker for investors. While this is also true for other corporate business documents such as a business – if there are glaring errors or spelling mistakes, for example – this can thwart any potential investor from investing capital. Thus, both a compliant and professional PPM offering document is of paramount importance for the issuer of securities.
Aside from compliance with various state and federal (and if non-US, international rules), the private placement memorandum can outline current and future strategies and be used for future capital raising strategies. Such a PPM can give confidence to an investor that the intent of the company’s founders is long term in their view and that future capital raising initiatives will be undertaken professionally as well. Such professionalism does not end with the strategies of the PPM offering, but also with its risks and perils. Offering memorandum documents – and a prospectus as well – have a section on the risks of the business, events or products or services that could end the business raising capital altogether. While an entrepreneur may want to only show the ‘great’ things about the business, the risk factors are an honest assessment of the market and the company’s products or services and should therefore be written with great detail. The risk factors serve various purposes. For example, the risks educate a potential investor about the general pitfalls of the company, and if company does in fact lose the investment capital (e.g. goes out of business) an investor shouldn’t cry foul. He or she was adequately warned about the company’s risks in the PPM and still invested.
Why Write a Private Placement Memorandum
- A private placement memorandum (PPM) is often required by state, federal and jurisdictional law. This compliance is crucial for a capital raise as it shows the issuers of the securities to take legal matters seriously. The PPM acts as both a guide and strategy for the issuers and gives investors reassurance that all legalities were implemented, thus building trust.
- In addition to compliance issues, a private placement memorandum will detail the securities being offered. For example, if a company is offering equity shares details of the securities such as the price of the stock, how many shares and more For debt PPM offerings, the terms of the bond or note would be detailed, including components like interest rate, maturity date, payment terms and more. As noted above also, the risk factors would be noted. All of this translates into full disclosure for investors so that any party thinking they want to invest would be able to make an educated decision (emphasis) about doing so.
PPM.net – What We Can Do New York Companies
PPM.net is a world class writer in private placement offering memorandum documents. Our team has decades of experience drafting PPMs for virtually every industry including in most of the world’s most popular onshore and offshore jurisdictions. Our team prides itself on producing the highest quality private placements, under budget and before deadlines. PPM.net is the outsourcing choice of hundreds of companies who choose to funnel work to our team because of our speed in writing and competitive pricing models. Reach out to us anytime. Whether you need a private placement memorandum PPM or other offering document our team of consultants and attorneys are more than happy to help.
Feel free to contact us for a free private placement memorandum consultation.