Private Placement Memoranda
Development and Preparation
A Private Placement Memorandum (PPM), also known as an offering memorandum, is a legal document stating the objectives, risks, and terms of investment involved with a private placement of unregistered equity or debt securities with prospective investors.
A PPM includes items such as forward looking financial statements, management biographies, and a detailed description of the business. Included within the PPM is a vast array of detailed financial data including the terms and conditions of the offering, nature and pricing of shares to investors, minimum/maximum levels of investment, and attendant risks. The entrepreneur’s business plan occupies a separate chapter or section within the PPM. PPMs often encompass as many as 60 to 80 pages or more.
A PPM serves to provide prospective investors with information on the securities offering and to protect the sellers from the liability associated with selling unregistered securities.
The PPM delivers comprehensive disclosure and transparency information to investors so that investors can make informed investment decisions.
The rules for the offering of unregistered securities by means of PPMs are set forth by the United States Securities and Exchange Commission (SEC). These rules and regulations are complicated and often appear to be confusing.
An entrepreneur is not required by law to provide a PPM to prospective investors for the offering of unregistered securities. There are, however, some important reasons for doing so, pertaining to risk reduction.
1. A PPM acts like an insurance policy in the event that the entrepreneur is sued by its investors who had become disgruntled often due to unimpressive financial results of the entrepreneur’s company.
2. An often used legal strategy of such investors is to argue that the entrepreneur failed to disclose certain critical information or neglected to provide transparency about the business operations, financing, or management actions. These lawsuits may involve substantial damages.
3. In the event that a lawsuit is filed against the entrepreneur and/or its company, seeking damages due to a lack of disclosure and transparency, a carefully constructed and extremely well written PPM will help to quash such a lawsuit and preserve the company’s financial resources.
If you decide to engage with an attorney who has considerable experience in developing and writing PPMs for successful entrepreneur clients, then be prepared for steep pricing, usually in the range of $15,000 to $30,000 or more. In addition, the time needed to complete the PPM by an attorney/law firm may very well be 60-90 days or longer.
My proposal includes a substantial cost advantage over your attorney’s pricing. My charge to develop and write a compelling PPM, which embraces all the rules and regulations of the SEC in connection with PPM compliance, falls in the range of $7,000 to $9,000. My PPM clients include Internet, Financial Services, Social Media, Retail, Wholesale, and Real Estate.
I have substantial experience in developing and writing PPMs that operate to protect the business and financial interests of entrepreneur clients.
My turnaround time to create a successful PPM is usually 30 days. If you also need a business plan and a PPM, then I offer special pricing to create both documents concurrently in a timely fashion.
I provide a comprehensive array of business consulting services including Compelling Business Plans, Executive Summaries, Strategic Planning, Marketing, Advertising, Social Media, Public Relations Plans, Private Equity/Private Debt Financing, In-depth Financial and Statistical Analysis, Business Advisory Services, International Private Lending, and Import/Export Trade Financing.
For more information, please contact:
Business Consultancy and Advisory
(310) 403-1983 Phone and Texts
do NOT contact me with unsolicited services or offers