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A Business Law Blog for Entrepreneurs, Startups, Venture Capital, and the Private Fund Industry.

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Private Offering Archives

What is a Private Placement Memorandum?

September 30, 2020 by Taylor Wilkins

A Private Placement Memorandum, or “PPM,” is a disclosure document often used in connection with a private offering of securities. It contains a compilation of information about the company issuing the securities, the terms of the securities, and the risks of investing in those securities. This article explains the legal background underlying why a PPM is commonly used and overviews what is typically included in a PPM.

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Filed Under: Private Equity and Hedge Funds, Startups and Venture Capital Tagged With: PPM, Private Offering, Private Placement, Private Placement Memorandum, Recent Startups

Dos and Don’ts of Conducting a Rule 506(b) Offering

September 30, 2019 by Alexander J. Davie

When raising capital, a company must comply with securities laws. As previously discussed, all offerings of securities, must either be registered with the SEC or exempt from such registration. Rule 506(b) is the most commonly used securities exemption for private companies. Even after complying with the basics of this exemption, there are many nuanced requirements that, if missed, can jeopardize qualifying under the exemption. Failure to comply with Rule 506(b) can subject an issuer and its officers and directors to various penalties. The SEC and state regulators can institute investigations and administrative and civil actions, enter various orders, and impose significant monetary penalties, and can transmit evidence to the U.S. Attorney General, who can bring criminal proceedings. In addition, violating securities registration requirements entitles the purchasers to rescission rights under federal and state laws. This blog post compiles some of the best practices for conducting a 506(b) offering in a bullet-pointed list for easy reference.

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Filed Under: Startups and Venture Capital Tagged With: Private Offering, Recent, Recent Startups, Regulation D, Rule 506(b)

The JOBS Act, a Year Later – Part 1: Introduction

March 18, 2013 by Alexander J. Davie

It’s been almost a year since Congress passed the Jumpstart Our Business Startups Act (or JOBS Act). At the time, the passage of this bill was greeted with significant enthusiasm from the start-up community. Among other things, it provided for a crowdfunding exemption from securities registration requirements and a repeal of the prohibition on general solicitation of investors in connection with certain private offerings. A year later, how do things stand? In this first of a series of posts, I’ll explore how implementation of the JOBS Act has progressed and what we might expect in the future. [Read more…]

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Filed Under: Startups and Venture Capital Tagged With: Crowdfunding, IPO, IPO On-Ramp, JOBS Act, Online Angel Investing, Private Offering, Regulation A, Regulation D, Rule 506, SEC, Securities

U.S. House Votes to Adopt Six Measures Loosening Securities Regulation for Smaller Companies; Provisions Include Crowdfunding and “IPO On Ramp”

March 8, 2012 by Alexander J. Davie

The U.S. House of Representatives voted earlier today (March 8, 2012) to pass the Jumpstart Our Business Startups (JOBS) Act.  The bill is actually a compilation of six separate measures that have been proposed in Congress (and in some instances already passed in the House) which loosen securities restrictions on smaller companies.  Here are brief summaries of each measure: [Read more…]

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Filed Under: Startups and Venture Capital Tagged With: Blue Sky, Crowdfunding, Dodd-Frank, IPO, Private Offering, Regulation D, Rule 506, Sarbanes Oxley, Say on Pay, SEC, Securities, Securities Exchange Act

Working Effectively with Your Lawyer: Don’t “Recycle” Legal Work

December 29, 2011 by Alexander J. Davie

Recycling is generally considered a good thing when it comes to trash.  It helps the environment and conserves resources.  However, in the context of legal work, it is not such a good thing.  Of course, when I use the word “recycle,” I don’t mean recycling the paper that the legal documents are on.  I’m talking about recycling the actual words on the page.  When a client “recycles” their lawyer’s work which was performed on a previous deal and uses it in a new deal, the client is asking for trouble. [Read more…]

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Filed Under: Effective Attorney-Client Relationships Tagged With: Attorney-Client, Blue Sky, Buy-Sell, Capital Raise, Founder, Friends and Family Round, Private Offering, SEC, Securities

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About the editor

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Strictly Business is a business law blog for entrepreneurs, startups, venture capital, and the private fund industry. Its editor is Alexander J. Davie, an attorney at Riggs Davie PLC based in Nashville, Tennessee. His practice focuses on corporate, securities, and business law. He works mainly with technology companies, including startups and emerging companies, and private equity, venture capital, and hedge funds.
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