A private placement memorandum is used by startup companies, entrepreneurs, as well as established companies to raise financing from a select group of investors under Regulation D, Rule 504 of the Federal Securities Act of 1933.
The benefits of having a private placement memorandum when raising money from investors is that you control the terms from day one in deciding what percentage of the company investors will receive in terms of either equity, profits, or a combination of both.
72Equity guides you in making the best decision on whether your private placement memorandum will sell LLC Units. Limited Partnership Shares, Common Stock, Preferred Stock, Or Convertible Debt.
The choice in what type of security to offer is usually based on the industries and the risk profile of a company.
Further, many entrepreneurs who contact securities attorneys to write a private placement for them realize that the cost of drafting one averages $10,000-$20,000 based on an attorney’s hourly fee of $400.00 and spending about a week to draft one. At 72 Equity, we are experts in drafting and writing a private placement memorandum at a fraction of a cost that securities attorneys may charge and we incorporate that into a total packaged that is affordable for startup entrepreneurs and established companies.
A private placement gets your business plan “investment ready” meaning that we also include operating agreements and a subscription agreement which lets an investor fill out his profile, the amount of an investment he wants to allocate for your company, and then the ability for him to either write you a check or wire transfer his investment to your corporate bank account.
With just a business plan, you actually are negotiating against yourself versus showing the investor that if you can’t structure the terms you want from day one, why would an investor believe in you that you can have any leadership or negotiating abilities in actually running your business after you get funded?
For a free no-obligation consultation, Please contact us at 310-651-0799 or deals @72equity.com so we can review your needs and tell you the best way to execute them. Alternatively, if you wish a quicker response, please fill out the needs analysis form below.