Far too many businesses fail to raise capital because they lack the proper documentation, or because their marketing and offering materials (business plans, private placement memorandum, investor presentations) are unprofessional, unpersuasive, inadequate or incomplete.
If you are raising capital from multiple private ("angel") investors, a private placement memorandum (PPM) is a necessary part of your documentation. Unfortunately, however, the vast majority of entrepreneurs and business owners are not familiar with details of preparing a private placement memorandum and marketing a private placement offering. In too many instances, this lack of knowledge prevents them from raising necessary capital, or -- even worse -- it can create costly liability problems.
To assist entrepreneurs, we created this report - "The Top 10 Private Placement Memorandum Mistakes" - to help answer some of the most frequently asked questions. We hope the report will help prevent many of the common errors we see businesses make during the process of preparing a private placement memorandum, marketing it to investors, and raising (or failing to raise) capital from private investors.
Some common questions answered in the report include:
- When do you need a private placement memorandum to raise capital?
- What types of disclosures must be made in a PPM?
- How can you market a private offering, while retaining a Regulation D exemption?
- What types of intermediaries and "finders" can promote a private offering?
- What types of investors can participate in a private placement?
- What are your options for preparing a private placement memorandum?
- How often should you edit or update a PPM?
Click here to download the report: Private Placement Memorandum Mistakes
If you are seeking professional assistance with your PPM, Growthink offers professional private placement memorandum writing and consulting services.
Or, if you're writing your PPM yourself, you can use our Sample Private Placement Memorandum Template to finish your PPM quickly and easily, so that you spend less time "preparing," and more time speaking with investors.
Just yesterday, America's 3 largest automakers -- Ford, GM, and Chrysler -- all submitted business plans to congress.
Here are the original copies of the plans:
The potential repercussions...
What others have to say
Entrepreneurs: what do you think?
Here at Growthink, we're curious to hear what entrepreneurs -- who are used to shopping their business plans around to lenders and investors -- have to say about the automakers' business plans and potential bailout.
As a supplement to our consulting practice, we're pleased to announce the launch of Growthink University, our new membership club dedicated to teaching entrepreneurs and business owners how to raise capital for their businesses.
The club assembles 10 years of capital raising expertise and methodologies developed and refined by Growthink, and gives entrepreneurs an additional "Do-It-Yourself" option to perfect their business plans.
Growthink University covers topics including, but not limited to:
How many times have you heard someone say, "Don't put all your eggs in one basket"?
When it comes to any kind of investing, this is very good advice.
But, if this is the case, why don’t private equity investors diversify?
Unfortunately, most individual investors in private equity significantly under-diversify their portfolios -- investing in one or only a handful of companies. By so doing, they both greatly increase their risk profile and greatly decrease their probabilities of seeing investment return.
As the investing month of October mercifully draws to a close, there is now a palpable sense of calm in the financial markets. While the horrific damage – in both value and psychological terms – is very, very real, and may take years from which to recover, there has been a healthy mindset transition to a “what is to be done” thinking, feeling and acting.
In times of economic crisis, far too many business owners revert to “safe mode” as panic spreads. A "responsible" course of action typically includes one (or more) of the following:
Here's a download of a fantastic conversation Growthink co-founder Dave Lavinsky recently had with Ron Feldman, Co-Founder and CEO of Kwiry.com. Funded by Hummer Winblad Venture Partners, kwiry is a service that turns text messages into reminders you retrieve online.
The extreme malaise in the financial markets is unlike any of us have seen in our lifetime. It is discouraging and disconcerting on many levels.
As Americans it is gut-wrenching to see so many proud institutions and the country as a whole take such a hit in prestige, wealth, and reputation.
For the private equity and venture capital world's as a whole, the erosion of stock market value reduces the likelihood and size of prospective acquisitions and the buoyancy of the IPO market - which in turn drives down earlier-stage deal valuations and the general "doing deals" excitement levels. We have already seen the shrinking of the hedge fund world these last few months - look for this contract to start hitting the private equity and venture capital markets.
But certainly by no means is all bleak nor are we at the end of days. As we know, at the end of dry desert, green grass grows. Without question, from the seeds of the current market correction will grow the great opportunities of the next 5-10 years.
So, for those with creativity, resilience and persistence, now is a great time to start and/or grow successful, lasting businesses.