Private Placement Memorandum (PPM) is a formal business document for raising capital from Accredited Investors and/or Business Sophisticated Investors.  Much like a business plan, it clearly points out the 5 W's: Who, What, When, Why, and How.  Every company seeking outside capital needs a PPM.  A business plan is great for banks and Intra-State investors and falls under state Blue Sky Laws. A PPM and proper Securities and Exchange Commission exemption filings, grants permission to raise capital in multi-states plus target investors with a higher net worth, income, or business sophistication without becoming a public company. Private Placement Memorandums point out what will be given in exchange for an investment in a private company such as equity (shares or membership units), interest, or other ROI financial mechanisms. 

Complete an Online Needs Assessment Questionnaire to begin.

After your Private Placement Memorandum is complete, contact a Private Equity Placement Agent to help acquire investments for your start-up.  Placement Agents raise capital for organizations for a contigent fee or flat fee based on the capital amount size.

Private Equity Placement Agent Directory

The Securities and Exchange Commission (SEC) have several exemptions which allow a company to raise money without filing for public offering.  Regulation D  is the most popular and useful exemption used by the majority of private companies seeking capital: Rule 504, 505, and 506.

Rule 504 allows a company to raise upto $1,000,000 within a 12 month period without formal securities registration.  Companies under Rule 504 may not advertise or solicit their securities to the public and must sell "restricted" securities unless State law permits.  Securities can only be sold to Accredited Investors which is defined by the SEC.

Rule 505 allows a company to raise up to $5,000,000 within a 12 month period to an unlimited amount of Accredited Investors and up to 35 other persons where the spohisitication or wealth standards from other exemptions need not apply.  Rule 505 also states that investors must receive "restircted" securitites which cannot be sold for six months or longer without registration and general solicitation or advertising is prohibited.  All companies filing under Rule 505 must meet financial statement requirements.

Rule 506 or often called the "safe habor" exemption, permits a company to raise an unlimited amount of money from an unlimited number of "Accredited" Investors and up to 35 other business sophisticated investors whom possess sufficient business and finanical knowledge and experience capable of determining the merits and risk.  General solicitation or advertising to sell the securities is prohibited.  Companies must provide non-accredited investor disclosure documents and meet the Financial statement requirements.  The securities offered must be "restricted", meaning the securities cannot be sold for at least one year without formal registration.

For more information, please visit the Securities and Exchange Commission or the SEC Q&A: Small Business section.

Complete an Online Needs Assessment Questionnaire to begin.