Private Placements

Term Main definition
Private Placements

The offering and sale of securities to a limited number of institutional and retail investors, structured so as to be exempt from and not require registration under the registration requirements of the Securities Act (and comparable applicable state securities laws). In short, a way to raise capital from sophisticated (usually institutional) investors without registering the offering or the securities with the SEC or going for venture capital. Companies engaged in private placements often engage Placement Agents to assist (and increase chances of success). Note that even exempt private placements are subject to federal and state notice filing requirements, anti-fraud rules, and regulations with respect to transaction participants (including prohibitions on finders). See also Accredited Investors and Private Placement Memorandum.