Private Placement

Refers to a funding round where securities (financial instruments like stocks, bonds, or equity) are offered and sold to a select group of investors, rather than being made available through a public offering. The focus is on reaching a smaller number of chosen investors.

The investors involved in private placements typically include friends and family of the issuing company, qualified investors (individuals or institutions meeting certain financial criteria), and institutional investors (organizations like banks or investment firms).

One important aspect of private placements is that they are not made available to the general public, which means they are exempt from the requirement of preparing a prospectus. Instead, they are issued using an Offering Memorandum. An Offering Memorandum provides detailed information about the investment opportunity, including the terms, risks, and other relevant information for potential investors.