Private-PlacementPrivate Placement of Securities

Private Placement of Securities, or Private Equity Offering is the process of offering and selling securities to potential investors without first having to register the securities with the Securities and Exchange Commission or for securities sold only in South Carolina, with the South Carolina Securities Division responsible for the regulation of the securities industry in South Carolina.  This means that business owners offering private equity opportunities as a way in raising capital must operate under state law and federal securities exemptions.

In a private placement, a business or entrepreneur raises capital by selling equity to select investors, such as family, friends, angels, institutional investors, venture capitalists that meet certain qualifications.  Business owners and entrepreneurs seeking to raise capital by means of a private placement usually do so because there is less time and money associated with the private offering’s preparation and execution. Furthermore, private placements offer companies the ability to customize the private offering for targeted investors, set the terms and conditions of the private offering, and keep information about the company private.

Business owners should engage our Frame Legal corporate attorneys with experience in securities laws matters to guide the business owners through the complexities of preparing the private placement memorandum, securities law,and securities law exemptions. Business accountants are also necessary to provide financial reports and projections.
Typically, founders and officers of a start-up business prepare and coordinate the private placement process and seek the necessary research and information needed to ensure the offering is structured in the manner that best suits the company’s goals and the investors goals. Our Charleston corporate lawyers recommend business owners focus on the number and type of potential investors they seek in order to attract.