A sample private placement memorandum (PPM) can be easily found on the internet. While some are available for a fee, some may even be purchased freely. Using such a document can give your business an overview of the information and language you must develop to create a PPM, but, in the end, you will still need the help of a business consultant and lawyer to make sure your document is sound.
Choosing a Sample
Look for a sample document dealing with a similar type of offering. This should be for a similarly structured business (corporation if yours is a corporation, LLC if yours is an LLC, etc.) and for a similar amount of capital. Some sections will be substantially different for an LLC or limited partnership versus a corporation. Firms raising different amounts of capital may seek exemption under different federal rules, each with specific restrictions.
Using Multiple Samples
The best tactic to follow if you intend to start by writing your PPM from scratch, is to use multiple samples. Certain sections may be left out or treated differently in individual samples, but if you use a number as a foundation, you will be gain a greater sense of how firms create PPMs.
Certain formatted elements of the PPM are worth noting and using as a basis for your own PPM. Tables should be used wherever possible to show financial data, the use of proceeds, the capitalization of the company, and the details of the terms. The samples will show examples of these types of tables.
Some general disclosures and generic disclaimers in the sample PPM can be reused in your own. However, you will have to go much deeper than this generic information by delving into specific risks associated with your company. This is information you cannot find exclusively in a sample, although you can see examples of what the writer found to be the specific risks for his firm.
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