A private placement memorandum (PPM) serves as a single comprehensive document outlining the material details about an offering—a one-stop shop for information. However, a poorly constructed offering document can lead to investor harm and even legal trouble for issuers.
A PPM is one of the first things an interested investor will want to review. If you do not exercise appropriate care in the drafting of this fundamental document or leave out vital information, it can leave you at risk of material misstatements and investor harm.
There are a number of sections that a PPM should contain, including an offering overview, business plan, management bios, and more. Each section is broken down so that you know which details to include.
Throughout your PPM, you’ll need to disclose a number of risk factors and other disclaimers in order to protect yourself from liability and your investors from making a misinformed decision. These include general securities risks, industry risks, tax risks, and more.