Private placements are a very important source of capital (equity and debt financing) for emerging businesses. In contrast with the public offering process, placements of shares are made in the exempt market with accredited or sophisticated investors.
Private placement is the issuance of securities in transactions that do not occur on a public exchange.
Private placements offer issuers competitively-priced medium and long term business finance (equity and/or debt) that may complement a company’s existing bank facilities and diversify its funding sources.
Capital Raising:
Typical deal size is flexible and we know of private placement ranging from $100K to $500 million. So a really wide range of business financing can be done through private placement. Investors in private placements include banks, mutual funds, insurance companies, and pension funds.
Attractions:
Private placements can be tailor made, providing issuers flexibility in currencies and maturities.
A company does not have to be public in order to complete a private placement; private companies do them all the time.
Legalities:
Regulation D sets forth certain guidelines for compliance with the Private Offering Exemption.
Private placements are done under Sections 3(b) or 4(2) of the 1933 Act as construed or under Regulation D as promulgated by the SEC, or both.
Private Placements Companies registering for a private placement must file different disclosure documents in each state, which are often based on different exemption provisions.
We Can Help: We can prepare a top quality Private Placement Memorandum, at an affordable fee, to help you raise capital from accredited investors, either as debt or equity. You can contact us with your requirement.
