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Private Placement Offering Memorandum

Private Placement Offering Memorandum

Why Write a Private Placement Offering Memorandum?

Entrepreneurs and heads of growth-oriented companies often ask why they need a private placement memorandum? What is it about a private placement memorandum – also called an offering memorandum, or “OM” for short, or just referred to as “PPM” – that drives a company to create one?

The private placement memorandum is a crucial document for raising investment capital from a group of private investors. Many would agree that a business plan is any entrepreneurial company’s most vital document. A well written and researched business plan acts both as a guide and road map for the business and as a representation of the business for others, especially investors. Business plans such as those we create at demonstrate that one cares for his or her business. Of course, entrepreneurs cannot predict what the market reaction to their new product or service will be. One’s business plan may not be accurate 100% of the time, but it is a good faith effort to describe and set out your expectations for the business.

A private placement memorandum (PPM) can act in a similar way, laying out the plan for how an entrepreneur seeks to raise capital to grow the business.

Main Reasons for Writing a Private Placement Memorandum (PPM)

  1. A private placement memorandum(PPM) can provide a layer protection to the entrepreneur and the company. A key element of the offering memorandum is disclosure of all pertinent risks. By disclosing risk, the private placement memorandum gives investors the required information to make a sound investment decision. Investments are inherently risky, and the private placement memorandum can shield the company and its directors from any negative claims (e.g. avoiding rescission claims by investors) if the investment does not work out. Potential investors must do their own homework before investing. Given that the relevant risks are outlined in the private placement memorandum (PPM); the entrepreneur will have some protection in case the investment falls flat as a result of one of the disclosed risks. A PPM can with protection from investors seeking recourse of their investment.
  2. A private placement memorandum is a professional document. Private Placements cover the need to comply with rules and regulations in the global locations where Private Placement clients operate and raise capital. Disclosures of risk guide private placement offerings, and a professional private placement memorandum (PPM) document outlining all relevant information is an important consideration for any investment. It shows that one has done the necessary preparatory work to properly raise money and to accept investment capital. assists in the drafting of the private placement memorandum (PPM). Our company has written documents for such diverse industries as real estate, hi-tech, space and underwater exploration, food establishments, hotels and resorts, and much, much more.

Feel free to contact us for a free private placement memorandum consultation.