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Private Placement Memorandum
Sample
Private Placement Memorandum (PPM) For FREE
A Private Placement is an extremely complex document. The primary
purpose of a PPM is to give the entrepreneur the opportunity to present all
potential risks to the investor. The PPM protects the entrepreneur in the
event that the investment goes sour! That's why it's so important that the
private placement memorandum be accurate and complete.
An attorney MUST review your offering to assure it complies
with all national and state regulations. The Private Placement below is
meant as a starting point for groups or individuals who want to piece
together a PPM themselves, save some money and then take it to the attorney
for review. An attorney must review your PPM to assure compliance with your
state's securities laws. Failure to do so could cause some serious problems
down the road, especially when approaching an initial public offering!
This is a very detailed, 70+ page Private Placement
Memorandum (PPM which includes a sample engagement letter, investment bank
term sheet, due diligence checklist, sample private placement memorandum and
the subscription agreement! Everything your company needs to issue stock in
accordance with the Securities and Exchange Commission. Details the summary
of the offering, financial data, industry overview, management, etc.
There are several ways in which companies approach the
creation of a PPM.
- Attorneys. Many firms
simply retain an attorney to prepare the PPM. Once complete, the
management team is responsible for soliciting and pitching potential new
investors. The only fees incurred are those of the attorney and the time
of the management team. Attorneys will charge from $5000 to $20000 for a
full private placement. An attorney may be a good route for companies
that already have a well established network of possible investors to
pitch the investment opportunity.
- Investment Banks. Other
firms hire an intermediary (investment bank) to help with the capital
raise. Hiring an intermediary can be tricky.. An entrepreneur will
encounter all sorts of institutions offering all sorts of different
promises to raise money for the start-up. The decisions and processes
can be very confusing and time-consuming. For many start-ups a wrong
decision will KILL the company. There are all sorts of negotiations
involved when retaining an investment bank, and there many different
types of investment banks. As the entrepreneur YOU must be at the top of
your game or you will get the short end of the stick!
- PPM Specialists. Firms
specializing in this arena are often a hybrid cross between legal
counsel and an investment bank
The PPM offered for sale below is a starting point for all
entrepreneurs and management teams considering the possibility of raising
capital via a Private Placement. The document was prepared by a highly
reputable legal firm in conjunction with the efforts of management. This PPM
successfully raised over $15 million from individuals and institutions over
the course of the raise.
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Included in this download:
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Engagement Letter. Typically
sent by the investment bank to the entrepreneur.
It contains much of the same stuff as in the term sheet,
basically even a higher-level overview of the proposed terms.
Many times before a term sheet is kicked out by the
investment bank, an engagement letter will be sent as a show of
commitment and as initial introduction to the general terms that
the investment banker is considering.
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Investment Bank Term Sheet.
Commentary on the term sheet, the terms, and how to get an i-bank
to consider taking you on as a client
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Due Diligence Checklist that
the i-banker will give to the management team during the
preparation of the PPM.
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Private Placement Memorandum
(company name omitted) that raised $15 million from individuals
and institutions
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Subscription Agreement that
accompanies the Private Placement and commentary on what is an
"accredited investor."
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These documents are designed for business
owners who have a basic understanding of private placements. It is
presented only as a sample document for educational and reference purposes.
In any private placement, it is important to retain legal counsel, and this
document should in no way be used to substitute for such counsel.
Click here to download
the PPM for FREE.
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