Financial Poise

Private Placement

  • October 19, 2021
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A Private Placement is a private sale of securities to an individual or group of accredited investors. A private placement is mostly used by seed, startup and early stage companies, as it doesn’t require the registration with the Securities and Exchange Commission. Securities sold in a private placement can be in any form, including equity, equity-linked and debt, and can be issued by any type of entity, including funds, private companies, and even public companies (usually in private equity-like transactions called PIPEs, an acronym for a private investment in public equity). To sell securities under a private placement, an issuer needs to prepare a PPM. A PPM is a formal document in which an issuer presents an offer to potential investors. A PPM typically includes a description of the investment opportunity, risk factors associated with investing, a summary of the issuer’s capital structure, a description of who will manage the investment opportunity, the terms of the offering, and various other disclosures.