Private Placement Offerings - Corporate Finance Lawyers At Brewer & Pritchard, P.C.
Whether you are starting a new company or trying to grow an existing company, you need a strategy to raise capital. For many companies, a funding process known as a "private placement offering" is the best way to do so. Because a private placement offering is essentially an exemption from registration with the Securities and Exchange Commission (SEC), you should consult with an experienced legal counsel in order to make sure you are fully in compliance with the law. In Houston and throughout Texas, business owners trust Brewer & Pritchard, P.C. to assist with these offerings.
Is a private placement offering right for your business?
There are many benefits to financing your company or business venture through a private placement offering. Some of the key benefits of a private placement include:
- Lower transactional costs because you do not need to register with the SEC.
- More freedom to structure the transaction because of the smaller number of investors.
- Rapid penetration into the capital market as compared to a public offering.
Again, a private placement offering is exempt from registration with the SEC. In order to quality for such an exemption, you need to qualify under very specific criteria. Both federal and state laws apply to these offerings. That's why it's so critical that you receive legal advice from an experienced private placement offering attorney.
Depending on your business' needs, we may be able to pursue any of the following exemptions:
- Section 4(2), the broad "private offering" exemption.
- Section 3(a)11), known as the "intrastate" exemption.
- Regulation D, which contains three different exemptions:
- Rule 504: $1 million limit, but can be opened to all investors.
- Rule 505: $5 million limit, but limited to "accredited investors" and a limited number of non-accredited investors who have no particular restrictions.
- Rule 506: No dollar limit, limited to "accredited investors" and a limited number of non-accredited but "sophisticated" investors who must meet certain criteria.
The laws governing this corporate finance option are complex. Serious penalties exist for companies that run afoul of the SEC. That's why it's critical to consult with a private placement offering lawyer before you begin the process. Contact us today to see how we can help raise capital for your business in a legal, efficient manner. Call 800-445-8710.