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In terms of the equity raise, at what point does a PPM have to be drafted?

Can you market or have conversations with potential investors before there is a PPM?


Answers
  • David LeGrand
    November 19, 2020

    A PPM is technically required only if you sell securities to non-accredited investors.

  • Clem Turner
    November 19, 2020

    Your disclosure document must be drafted before you can take in money from investors. I like the investors to have held the PPM for at least one week, preferably two before investing. Assuming a raise pursuant to Regulation D Rule 506(c), you can market in the public and have conversations with investors without a PPM.

  • Matthew Rappaport
    November 19, 2020

    Before you go to market. Once the investor likes your deck, basically the next thing the investor gets is the PPM. I don't want to put too fine a point on it, but investors will think you're an amateur if they express interest and your PPM isn't ready yet.

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