Meeting Business and Regulatory Needs in Exempt Securities Placements
For various reasons, both private and public corporations may turn to private investors — hedge funds, pension plans, mutual funds or venture capital groups — rather than the public securities markets to meet current capital needs. A private placement is a securities issue that is not offered to the general public, but instead is sold on negotiated terms to one or more investors, usually institutional but typically at least accredited retail investors.
The New York securities law firm of Gottbetter & Partners, LLP, provides one-stop client service for any issuer, investor or placement agent on matters from negotiating the terms to "blue sky" compliance in the states where the securities are to be sold. Contact us in midtown Manhattan to learn more about our experience with private securities offerings, both in the details of structuring the deal and in your broader corporate finance or investment strategy.
Securities offered by private placement are unregistered with the SEC, but the issuer must comply with the various exemption criteria of Regulation D of the Securities Act of 1933 (or another available exemption). These typically involve limits on the total value of the securities offered within a consecutive 12-month period or limitations on offering the securities to non-accredited investors (those whose net worth and income are not high enough to support a presumption of sophisticated investment experience). Securities may also be offered to non-U.S. persons under Regulation S provided certain offering criteria are met.
Fully Integrated Client Service in Private Placement Offerings
Our lawyers provide the full range of services necessary to make a private placement work:
- Defining the issue to meet corporate and investor needs: preferred stock, convertible debentures, warrants or options
- Defining the scale of the issue and the appropriate Regulation D exemption under Rule 504, 505 or 506 and/or Regulation S
- Identifying the market factors, business needs and regulatory considerations that will guide the timing of the issue
- Working with placement agents to identify likely investors
- Negotiating the terms of the offer with investors
- Preparing the private placement memorandum that presents the offering
- Preparing the subscription agreement that defines the terms of the offering
- Complying with state blue sky laws wherever the offering is to be sold
For additional information about the advantages of working with attorneys who understand the market factors as well as the legal requirements of a successful private placement, contact Gottbetter & Partners in New York City.
