Offering Memorandum: The anatomy of an Offering Circular
If you are going to start raising capital for your start-up or established business you’ve most likely been advised to have a Private Placement Memorandum written for your company so you don’t get in trouble with the SEC for selling securities without the proper structure.
The Offering Circular section of your document is crucial. Most likely you won’t be authoring this document on your own as it is wise to outsource this necessity to a trained consultant or attorney who specializes in PPM docs but you should be familiar with the basic anatomy of an Offering Circular so you can understand the PPM as a whole.
Here is a general breakdown of the sections of your Offering Circular, they are as follows (there are a few technical sections left out to streamline and simplify this explanation):
Amount of company equity you want to make available, escrow agent info, address and phone number, business locations presently and in the future and why have you decided on these locations, pertinent information about the company (date of incorporation , purpose of creating this company etc), risk factors in your industry, history of operations, time lapse from start-up to operational stage of the company, talk about the ins and outs of your competition, dependence on management, detailed description of the company, government regulations in your industry, who is retaining control of the company, dividend details, how did you arrive at the arbitrary offering price., details about officer’s salary, use of proceeds to repay loans due to officers and director, additional use of proceeds, in depth break down of business (summary, management, strategic partnerships etc), company balance sheet demonstrating assets, liabilities, shareholder equity etc.
This has been a general breakdown of the offering circular basics. Please consult your consultant or attorney for a more in-depth description. A Private Placement Memorandum can help you raise capital quickly and easily and is often the pivoting mechanism for a public offering. Take advantage of this valuable instrument as you pursue capital for your business.
Need Information about your Offering Circular, call 267-233-0183 Take Your Company Public contact Princeton Corporate Solutions.
