What is a Private Placement Memorandum?

A private placement memorandum (PPM) is a legal document that is used to sell securities to a small group of investors in a private placement. Private placements are a type of financing that allows companies to raise capital by selling securities, such as stocks or bonds, to a small group of investors rather than the general public.

PPMs are used to provide investors with information about the securities being offered and the company issuing them. They typically include information about the company's business, financial performance, and management, as well as details about the terms of the securities being offered, such as the rights and obligations of the investors and the company.

PPMs are often used in conjunction with a subscription agreement, which is a document that outlines the terms of the investment and the rights and obligations of the investors and the company.

Private placements are subject to certain regulatory requirements, and PPMs are typically reviewed by regulatory agencies, such as the Securities and Exchange Commission (SEC) in the United States, to ensure that they provide sufficient information to investors.