A private placement is a non-public offering of securities exempt from full SEC registration requirements. Placements are usually made directly by the company issuing stock, but they may also be made by an underwriter. The offering may be of debt or equity.
We read with interest the Economic Analysis section of the Commission’s final rule eliminating the prohibition against general solicitation and advertising in Rule 506 and Rule 144A offerings. We think the rule is a good one notwithstanding that its critics have valid concerns that must be addressed by the SEC, and which inevitably will also be addressed by market forces.
SEC lifts the ban. Time to re-think your portfolio?
The very point of being an accredited investor is that there is a whole world of alternative investment opportunities available to you that are not available to non-accredited investors.
On March 6, 2013, NASDAQ OMX Group, Inc. announced a joint venture with SharesPost, Inc. to launch a new secondary market trading platform for the purchase and sale of private company securities. The new marketplace, to be called The Nasdaq Private Market (NPM,) will be a private market for resales of restricted securities, with the main objective of providing increased liquidity for early investors, founders, and employees of private companies by enabling the efficient buying and selling of private company shares. Subject to regulatory approval, NPM is slated to become operational later in 2013. The new private trading platform presents an opportunity for accredited investors who have held restricted securities of a private company for at least one year to exit their investments.
FundersClub is a new type of venture capital platform, built around a unique online marketplace that allows accredited investors to become equity holders in FundersClub-managed venture funds – which then fund pre-screened, private companies. AIMkts spoke with CEO Alex Mittal about all things FundersClub to get some insight into why they’re industry wave makers right out of the gate, among other things.
CircleUp is an equity crowdfunding platform, presently open only to accredited investors, which primarily features existing U.S. consumer products companies. Ryan Caldbeck, CircleUp’s CEO spoke with AIMkts about raising capital, their focus retail and consumer goods and CircleUp’s presence as an investment platform.
Accredited investors who are not experienced in making such investments will suffer some degree of information overload, as they get up to speed on these investment categories. There will also be scams and schemes designed to take advantage of their lack of knowledge.
According to U.S. securities law, only accredited investors may invest in private equity, venture capital, hedge funds, and private placements. Regulation D, Rule 501 of the Securities Act of 1933 states the accredited investor definition as: (a) an individual (or married couple) whose (joint) net worth exceeds $1 million, excluding the value of the primary residence; or
In the world of middle-market buyouts, non-traditional funds (or fund-like groups) are playing an increasingly active role in the private equity domain. They include fundless sponsors, family offices, and even limited partners making direct investments in businesses. In this article, we will explore differences between fundless sponsors and more traditionally structured private equity funds.