As an entrepreneur or owner of a start up business, you know the importance of balancing your goals with your budget. While it is smart to create a reasonable financial plan, there are some places where you just shouldn’t cut corners. Drafting your Private Placement Memorandum (or PPM) is an important aspect that requires the expertise of a professional. While you may be tempted by cheap, quick online PPM templates, those documents may be missing essential clauses.
What is a Private Placement Memorandum (PPM)?
A PPM is an advanced legal document that provides investors with a wealth of information about your company, including the terms of any offerings and the risks involved in investing. Each PPM will differ, depending on the nature of your company, the type of investors you are trying to attract, and the specific offerings.
These important disclosures not only provide investors with a wealth of information, they also protect the company from future lawsuits in case the business goes south. Investors are quick to sue on the basis of securities fraud if they start to lose their money. With a proper PPM, they will have access to all the risks and benefits of investment before they make their final decision, essentially protecting you from suit. Additionally, a well thought through and immaculately designed PPM can also serve as a marketing tool, allowing investors to see the benefits and legitimacy of your brand.
The Danger of Using Online PPM Templates
Though they may seem quick, cheap, and easy, online PPM templates can pose a variety of dangers to your company. At PPM LAWYERS, we get to know your specific company, its goals, and strategies. Through this personal interaction, we are uniquely positioned to design a PPM that will successfully protect your company if investors begin losing their money. Online templates, on the other hand, were originally designed for a different company and may only contain the bare bones of a PPM.
Using these online templates is essentially like purchasing unnecessary equipment. If you were starting a consulting business, you wouldn’t buy an industrial oven, so don’t use an online template that is designed to protect someone else’s company (it certainly may not protect yours!). Each business is unique, and it is essential to protect your one-of-a-kind business with the proper, personalized documentation.
At PPM LAWYERS, we specialize in the representation of startups and companies just like yours. We will take the time to analyze and assess your business to ensure your PPM documents will adequately protect you, while also attracting investors. While we hope that your business succeeds, we also know the importance of protecting your assets in the future. As they say, an ounce of prevention is worth a pound of cure. For a free consultation, contact PPM LAWYERS today.