Private Placement Memorandum Summary

A private placement memorandum is a disclosure document that must be tailored to the terms of each specific offering. A generic template private placement memorandum, most often available as a sample document or for sale on an internet website, can never substitute for an attorney-drafted private placement memorandum Think Legal, P.C. prepares with a detailed legal understanding of both the business of the issuer and the underlying legal requirements of the private placement.
A private placement memorandum Think Legal, P.C. drafts for the private placement of the first round of securities for a start-up may include less detail and be less time-intensive to prepare than a later stage business with more complex operational history, previous financings, and other information. A private placement memorandum Think Legal, P.C. prepares for a limited partnership or LLC will be more complicated than one prepared for the same business operating as a corporation because a limited partnership or LLC will require the disclosure of more detailed investor rights, fiduciary duties, conflicts of interest, and tax consequences. The pricing quoted to the right assumes the first-round financing of a corporation, and more complex private placements may be quoted at other price points.

Private Placement Memorandum Details

The following list sets forth some of the information usually included in a private placement memorandum. If any purchaser of securities is not an accredited investor, the issuer must consist of at least the same information required to be disclosed in a registration statement were the issuer conducting a public offering. 17 Code of Federal Regulations §230.502(b)(2)(i)(A).
  • Front Outer Cover Page;
  • Front Inner Cover Page;
  • Summary Issuance;
  • Use of Proceeds;
  • Offering Price;
  • Dilution;
  • Plan of Distribution;
  • Description of Securities to be Offered;
  • Risk Factors;
  • Interests of Named Experts and Counsel;
  • Information Regarding the Issuer;
  • Disclosure of Commissions; and
  • Outside Back Cover Page.
The list above is informational only and does not include a heading for all information that should be included in a private placement memorandum.

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