Raising Capital: Get the Money You Need to Grow Your Business

Chapter 6Private Placements

One financing strategy that is available to early-stage and emerging-growth companies is the private placement offering, which generally refers to an offering of securities by a small or growing company that does not need to be registered with the Securities and Exchange Commission (SEC). A private placement can offer you (as the “offeror” or “issuer”) reduced transaction and ongoing costs because it is exempt from many of the extensive registration and reporting requirements imposed by federal and state securities laws. Private placements usually also offer the ability to structure a more focused and dynamic transaction, because they attract a small number of sophisticated investors. These investors may also provide ...