Private Placement Memorandums (PPM)

Available from Accessible Business, LLC

A Private Placement is an extremely complex document. The primary purpose of a PPM is to give the
entrepreneur the opportunity to present all potential risks to the investor. The PPM protects the
entrepreneur in the event that the investment goes sour! That's why it's so important that the
private placement memorandum be accurate and complete.

There are several ways in which companies approach the creation of a PPM.
􀂃 Attorneys. Many firms simply retain an attorney to prepare the PPM. Once complete, the
management team is responsible for soliciting and pitching potential new investors. The only
fees incurred are those of the attorney and the time of the management team. Attorneys will
charge from $5,000 to $20,000 for a full private placement. An attorney may be a good route
for companies that already have a well established network of possible investors to pitch the
investment opportunity.
􀂃 Investment Banks. Other firms hire an intermediary (investment bank) to help with the
capital raise. Hiring an intermediary can be tricky.. An entrepreneur will encounter all sorts of
institutions offering all sorts of different promises to raise money for the start-up. The decisions and processes can be very confusing and time-consuming. For many start-ups a wrong decision will KILL the company.

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