Private Placement Memorandum Checklist

Written by Dave Lavinsky

A private placement memorandum (PPM) is a document best created with the help of a professional. While samples and templates exist and are sold on the internet, your private placement memorandum must go far beyond the generic level to specifically address the terms and risks of your offering. That said, the following checklist provides the major sections of a PPM which should be included for almost any offering memorandum.

  • Cover Sheet and Table of Contents: To open the document, use a cover sheet with your company name, contact information and date. The table of contents should then delineate all of the sections within as well as the appendices or exhibits attached.
  • Key Disclosures: Before entering into the terms of the private investment capital, cautionary language should be used to explain the intent of the document and the limitations of its uses.
  • Summary: A summary over a few pages should detail an overview of the entire document, the business, and the private securities that are offered.
  • Risk Factors: This section should focus on both the specific and general risks facing the company which will impact the value of shares.
  • Use of Proceeds: Accredited investors are keen to understand how their dollars will be used to leverage the company to future success. When you raise capital, the funding shouldn’t be used for general operating expenses (except during a limited startup period), but should be used to develop capacity or purchase assets that will allow significant growth.
  • Capitalization and Dilution: The capitalization section or “cap table” should explain who currently owns what in the company. Dilution details what will happen to those shares as additional shares are issued including both ownership and voting rights.
  • Financial Data and Analysis: This is an opportunity to present a financial summary of the past and projected future of the company and to offer the management’s analysis of the company’s financial information and situation.
  • Business and Management: These sections, similar to a business plan, give a greater overview of the business and the management team.
  • Term Sheet: The term sheet or offering summary explains the specific offer that is being made including the number of shares, the offering price, commissions that the company must pay on the capital raised, and the type of shares. There may be a minimum and maximum number of shares to sell for the private placement to move forward. A table format is appropriate for this information.


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