Venture Capital LLC (VentureC) is a leading developer of private placement memorandums and business plans. The Company’s strategic alliance with various firms in the venture capital and private equity world greatly benefit companies that need professional and regulatory appeal when seeking to raise capital. Additionally, by utilizing VentureC’s document creation services, companies of all sizes and industries save thousands of dollars in needleless spending.
Lastly, VentureC’s team is unique in the sense that the management team comprises of attorneys, consultants, investment bankers and investors. Our team has a unique approach to document creation, capital procurement, networking and general business insight that very few firms can offer. Our offices are on Wall Street in New York, and as such we have access and insight to many of the inner workings of the banking and financial system.
What is a Private Placement Memorandum?
A private placement memorandum (PPM), also known as an offering memorandum, is the document that discloses all the relevant information the investor needs to know in order to make an informed decision about making an investment.
If your company is seeking capital from $50,000 to $500,000,000 it would benefit from the structure of a Regulation D Private Offering. Ventures needing seed capital or expansion capital for high growth rate companies will greatly benefit from the Regulation D Offering, which aim to provide the legal and practical method of raising capital from investors
The features of a private placement memorandum include, but are not limited to:
- The offering structure and breakdown of terms
- The share/unit structure (i.e. the ownership) of the company
- SEC disclosures about the shares/units being purchased
- Company information, i.e. history
- Information on company operations, i.e. business summary
- Risks factor involved with the investment
- Management team information
- Use of proceeds breakdown
- Transactional and banking information
- Investor suitability standards
- The subscription agreement
The subscription agreement is the "sales contract" for the shares of stock. Investors will sign and send to your company with their investment funds.
The private placement memorandum is crucial for businesses seeking private capital as it provides the investor with all of the prescribed data needed to make an on-the-spot decision about making an investment. As opposed to a business plan, the private placement memorandum also includes the subscription documents, the ‘contract’ for the sale of shares. Along with the memorandum and the subscription documents, an investor, in theory, could write a check on the spot (we have seen it many times, though not the normative).
Private placement memorandums are designed as a stand-alone document. This means that, in theory, no additional documents would be needed for the investor to make an informed decision about investing.
Many companies will (and in our opinion should) attach their business plans to the private placement memorandum as a support document. As long as the business plan is consistent with the information and model found within the private placement memorandum it is recommended that the plan be included. VentureC ensures that all of our clients business plans are consistent with the Offering Memorandum.
VentureC Creates 3 Types of Regulation D Private Placement Memorandums
Rules 504, 505, and 506
Regulation D—which was adopted in 1982 and has been revised several times since—consists of a set of rules numbered 501 through 508. Rules 504, 505, and 506, of which VentureC specializes, describes three different types of exempt offerings and set forth guidelines covering the amount of stock that can be sold and the number and type of investors that are allowed under each one.
Rule 504
Rule 504 of regulation d is considered by many to be the perfect answer for the small company that needs to raise up to $1 million but cannot afford the time or expense to go through the tedious SEC registration process.
Under the Rule 504 exemption, a company can offer up to $1 million of securities in a 12 month period. Important characteristics include the following:
- Securities (both debt and equity) can be sold to an unlimited number of persons, regardless of their net worth.
- General solicitation or advertising can be used to market these securities. Rules apply.
- These securities can be freely traded and not "restricted." Audited financials are not required.
Rule 505
Rule 505 of Regulation D is an exemption for limited offers and sales of securities not exceeding $5,000,000. Company can:
- Raise up to $5 million in a 12-month period.
- Security sales can be made to an unlimited number of accredited investor plus 35 additional investors.
- Disclosure documents, i.e. a private placement memorandum, must be delivered to all non-accredited investors.
- If dealing with accredited investors, the number of these is unlimited, but there is no advertising allowed.
Rule 506
Rule 506 of Regulation D allows a company to raise an unlimited amount of capital, as long as the company satisfies the following standards for an exemption under this rule:
- The company can raise an unlimited amount of capital;
- The company does not use general solicitation or advertising to market the securities;
- The sale of the company’s securities can be to an unlimited number of accredited investors and select few other purchasers. Unlike Rule 505 of Regulation D, all non-accredited investors, either alone or with a purchaser representative, must be “sophisticated”. This means that they must have “sufficient” knowledge and “experience” in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment;
- The company, i.e. the seller of the securities, must be available to answer questions by prospective purchasers;
- Financial statement requirements as for Rule 505; and
- Purchasers receive restricted securities, which may not be freely traded in the secondary market after the offering.
Form D – What is it?
The Form D Compliance Filing is the only filing document that is required by the Securities and Exchange Commission (SEC) in Washington, DC. It is an 8 page document detailing the relevant information about the offering, the company, use of proceeds, and the principals of the company.
The Form D is an “informational only” document and is not subject to a review or approval by the SEC and in fact the Form D is “filed.”
Selling securities of any kind to investors without filing the Form D could subject the company to fines by the SEC. The Form D, therefore, is an integral part of raising capital properly and legally. VentureC can assist in the filing of the Form D.
VentureC can create one of the Regulation D documents above and assist in filing.
Please contact us for a free consultation and quote.
Business Plans
Venture Capital LLC (VentureC) creates business plans for all levels and industries. Whether your company is a start-up seeking $100,000, or a company seeking expansion capital of $10 million, VentureC has the resources and capability to create an investor ready business plan. Additionally, if your company is not-for-profit, or seeking a business plan just for managerial guidance (meaning you are not seeking funding but would like an action plan), VentureC can help as well.
A properly written business plan should encompass some of the following characteristics:
- Executive Summary
- Mission & Vision
- Company Description
- Products & Services
- Industry Analysis
- Target Market
- Marketing/Sales Plan
- Competitive Analysis
- Management Team
- Operational Plan
- Financial Projections
- Exit Strategy
- Table of Contents
- Appendices
Our alliance with Business Plan Advisors™ (www.businessplana.com), a leader in business plan development, has greatly streamlined the process of business plan development. In many cases we can develop a professionally written business plan suitable for the most strictest of investors in our network. If our plans do not suit our investor network, then they are not good enough for our clients.
Please contact us for a free consultation and quote.
Additional Services:
Valuations: VentureC conducts valuations for many companies. We often are contracted to evaluate a company’s books and determine the selling or offering price. Our firm can recommend what you should offer investors in terms of ownership.
Company Formation: If you have not yet filed or created a corporation for your venture, or would like to restructure, VentureC can recommended the most attractive entity to create.
Website and Software Development: VentureC can create a website or tailored software for your company.
Please contact us for a free consultation and quote.
VentureC. All rights reserved.
VentureC does not sell securities of any kind and is not a broker-dealer nor is it registered with FINRA. VentureC is a consulting firm only.
Additionally, VentureC only has contacts that are accredited investors as defined by the SEC.