With the plummet of the economy and banks holding on to the bailout money they were supposed to be lending that was meant to stimulate the economy, the entrepreneurs are once again, thrown to the wolves.
Now there are phony, flybynight consultants popping up on the web who are reselling private placement memorandum authoring services. It's unbelievable to think that a company will spend $5,000 to $20,000 with an absolute amateur who doesn't know the first thing about a PPM or the legalities of this document that can lead to the client getting sued by investors down the road.
Who is looking out for the client? Sadly, no one seems to be looking past the almighty dollar and actually trying to help the entrepreneur succeed in raising the capital they need to grow their business which will lead to job creation and stimulating the economy. If you're a business that's trying to raise capital here is some advice on how to prequalify a PPM service to find out if they are truly the author of your document or if they are simply using a template that will get you burned down the road or if they are simply taking your money and outsourcing the service to another group that has no real compression of this intricate document.
Ask them, in a stealthy way, to define these basic terms that are simple for anyone that does this for a living. What are Blue Sky Laws and how does that affect you when you're raising capital? What is and do they include a complete state legend with your PPM? What is the difference between accredited and non accredited investors and how many of each can be used with each of the 3 types of PPMs?
What type of solicitation laws does the SEC have in place for a company that is fund raising with a Regulation D Exemption? How can you prepare for due diligence before the PPM is completed and in the hands of investors? These are just some of the most basic questions that will give you a feel for how well the consultant you are speaking to truly knows this industry. Always get all your questions answered before going with a consultant in this industry. Never go with a pushy consultant and always remember, the best Regulation D (PPM) consultants will answer all your questions without up sells or 'hurry up because this is a limited time offer' mentality. The SEC created Regulation D exemptions (PPM) to help companies raise capital in a streamlined, simple way and this is an incredible method for any business to raise a little or a lot of money. Find the right consultant that includes everything in one, cost effective bundle and you're on your way to getting the cash you need for your expansion objectives.
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Article: Offering Memorandums Help Raise Capital Fast Author: James Scott Publication Date: 2009-10-22 Total Views: 246 Word Count: 497 Category:Home /
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