Previous: Subscription Agreement
Company's raise capital by issuing shares of stock or interests for purchase by either the general public or through a private placement. The primary disclosure form for general public investors is a prospectus. For private placements, it's a Private Placement Memorandum or PPM; a disclosure document listing information about the business and its underlying security.
A private placement is a sale of stock or interests to investors who meet specific criteria. The criteria for accredited status include having a particular level of assets and net worth and non-accredited with investment experience. In many cases, a Subscription Agreement accompanies the PPM.
Next: Accredited Investor