Private Placement
This outline
is designed as a basic guide for companies seeking to raise money
privately via a private offering of securities in reliance upon
both federal and state exemptions from securities registration (commonly
referred to as a "private placement offering"). A private
placement offering is designed for business issuers who wish to
privately solicit equity or debt investment to fund growth and expansion
in a hurry. It is important to note, however, that a private placement
offering is only legal, and usually only successful, when the issuer
has some prior relationship with the individual or entity from whom a private placement investment is solicited. A private placement
offering may only be sold to those individuals or entities in which
a prior relationship has been established - i.e. friends, family,
or prior business acquaintances.
Raising capital
through a private placement offering (debt or equity) is a great
way for a company to raise seed capital to start initial business
operations, increase working capital, or finance the launch of a
new product line. The development of each private
placement offering we help design follows essentially the same process.
To receive maximum benefit from the specialized securities services
offered by GoPublicToday.com, our firm's guidance should be utilized
from the outset. A correct start will help your company avoid costly
legal issues, time-consuming additional work, and unnecessary delays
and expenses. The Private
Placement allows small companies to raise equity
or debt capital privately without having to file a registration
statement with the Securities and Exchange Commission or
any state securities agency. A Private Placement Offering is developed
in reliance upon both federal and state exemptions from securities
registration. In some instances, audited financial statements are
not required. The Company is not required to make any state or federal
filings until after the Company receives investment through the
private placement offering. After initial private placement moneys
are received, the Company is required to comply with federal notice
filings pursuant to the Securities Act of 1933, as amended (the
"Securities Act") and to file notice filings in each state
where the private placement offering was made from and into. This
form of exemption from the registration provisions is available
to small securities issuers pursuant to Regulation D, Rule 505 or
506, of the Securities Act. In general, this exemption allows the
Company to raise up to five million dollars in an equity or debt
offering with certain limitations and guidelines. GoPublicToday.com
can assist your company with the entire private offering process. The end result
of a private placement offering is that you will be able to privately solicit friends, family, and
prior business acquaintances for investment moneys - which can in
certain circumstances include your suppliers and certain customers
(no general solicitation allowed however). In addition, these securities
(normally common stock), once purchased, are considered to be "restricted"
and may not be resold without registratino or an exemption. Below is a short synopsis of the
process of positioning a company to conduct a private securities
offering. GoPublicToday.com and its network of securities professionals can guide you through this process. Initial
Corporate Preparation Pre-Offering
Preparation Offering Post-OfferingPrivate Placement
Develop and maintain an accurate corporate minutes book.
Develop the private placement memorandum or PPM (e.g., business plan inside of a full disclosure, legal document);
determine the initial capitalization of the
Company and structure/type of the securities offering; develop
the investor suitability and representation letter (e.g., "Accredited
Investor" and "Sophisticated Investor" Qualifications);
develop private subscription and other miscellaneous
documents to prepare your company for its private offering
of securities.
Obtain signed subscription agreements from investors, collect investments and issue certificates.
Prepare and file all notices with the SEC and the states in which offering occurs.