A private placement memorandum, also referred to as a “PPM” for short, is a document that outlines the terms of a private placement offering. If a company wants to sell some stock or issue debt securities, they would write a private placement memorandum and give it to an investor for capital infusion purposes. Our team at Prospectus.com have written several thousand private placement PPM offerings in over 50 jurisdictions spanning a vast multitude of industries, products and services. It is always suggested to draft a private placement offering prior to soliciting investors for capital. The memorandum itself outlines the terms of what the issuer is offering, while an investor will most likely balk at any entrepreneur that does not supply such a disclosure document. The private placement document will educate the investors on the offering at hand which will hopefully lead to an investment in the company.
Within the private placement memorandum will be such features as the basic terms of the offerings, the risk factor section, which is important for the issuer’s own protection, the market opportunity, the management team and their biographies, skills and strengths, tax issues, foreign and local investor issues, financial projections and the subscription documents, including the investor questionnaire and the subscription agreement. The private offering memorandum is not just a document that will detail the securities of the company and what it is offering. The document is an opportunity for the company to prove to investors that their investment will be safe with the issuer. Submitting a memorandum for a private placement investment looks professional and will assist in compliance with various securities laws and regulations.
Canada Private Placement Memorandum
A private placement memorandum business document is issued by a company that wishes to sell either debt securities or equity securities (and often a mixture of both).
Equity: Soliciting investment capital with a private placement memorandum is common for corporations and funds, like hedge and mutual funds, both onshore and offshore. Selling equities implies that some form of company ownership is being sold to investors. This is almost certainly the case for publicly traded companies selling equities, but in a private placement normally shares of a corporation or units of an LLC are sold privately. Mutual funds and hedge funds also sell shares, but most often this does not grant voting rights like in a corporation. Regardless if the entity is fund or corporation or an LLC a private placement memorandum is the standard document given to invest for investment consideration.
Debt: In a debt private placement offering, securities such as notes, bonds, convertible securities, debentures and others are sold to investors. The private placement memorandum will outline the terms of the debt issuance and offer, giving such details as the interest rate, maturity date, payment dates, risk factors and vital information on the product, the management team and company goals.
Our staff specializes in structuring and writing private placement memorandum offering documents for debt and equity issuance.
The usage and popularity of the term private placement memorandum is understood worldwide to mean a document, referred to as a “memorandum”, which details what the company is “offering” in return for investment capital. Read it backwards and you get “memorandum placement private”, i.e. a document detailing the offering of securities via a private offering. In addition to the term private placement memorandum the most popular word for such a document is a prospectus and an offering circular and a private placement memorandum, as well a red herring and others are also employed.
The private placement memorandum will usually contain the subscription agreement, which is the contract between the company selling securities and the investor who is buying them. The subscription agreement outlines the terms, and has numerous places for the investor to fill out and usually gives instruction where to send a check for subscribing to the securities, or bank wire details. The subscription agreement is of vital importance for any issuer, and the private placement documents should includeit. The subscription agreement is vital for the private placement memorandum as it is the remaining section of the document, that without an investor cannot give his capital.
Prospectus’ team of consultants and lawyers can help draft your Canada private placement memorandum for either debt or equity issuance in an effective, fast and cost affordable way. Reach out to us any time or meet us in any of our offices worldwide for a free consultation. Reach out to us any time or meet us in any of our offices worldwide for a free consultation.
- Prospectus Writing
- IPO Stock Exchange Listing
- Bonds Offerings
- 144A Reg S Offerings
- Hedge Funds and Mutual Funds
- Private Placement Memorandum
- Offering Circular
- Explanatory Memorandum
- Information Memorandum
- Fund Setup Formation
- Securities Identifiers
- Registration and Filing
- Legal Work
- Business Plans