Category Archives: FInance & Securities

How We Can Help You With Your Private Placement Memorandum

Regulation D is an efficient exemption mechanism in which to secure equity financing. It allows you to procure financing through a limited offer and sale of your company’s stock or securities without the requirements of registering under the Federal Securities Act of 1933. Part of the process is developing your private placement memorandum (PPM).

A Dallas securities law attorney can help
Making sure your private placement memorandum is developed properly is paramount. At the Ferguson Law Group, we are experts and can help you every step of the way. Part of that process includes:

  • An initial discussion to help us understand the goals of your offering
  • A review of any existing materials that you possess. These materials may include your business plan and marketing research
  • Additional detailed discussions to better understand your goals
  • Additional research, if required
  • A PPM draft
  • Assistance in helping you understand the best way to deliver your presentation, as well as how to answer questions
  • Continual support
  • The facilitation of any regulatory filings

Raising capital
Raising capital is the basic goal of any PPM. However, it is critical that you understand the common rules, as they relate to Regulation D. We will help you understand the nuances of the securities laws that you will need to abide by. Three of the common rules include:

  • Rule 504: Generally applies to securities sales up to $1 million
  • Rule 505: Generally applies to securities sales from $1 million to $5 million
  • Rule 506: Generally applies to securities sales in excess of $5 million

If you are getting ready to develop your private placement memorandum, you should call one of our Dallas securities law attorneys at the Ferguson Law Group at (972) 378-9111.

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Documentation Needed for a Texas Private Equity Fund

There is a lot more needed to starting a private equity fund than selecting a company to acquire and solicit investors. A tremendous amount of due diligence is required, including an array of documentation.

Document Overview
Part of the documentation that you will need for your private equity fund includes:

  • Private Placement Memorandum (PPM): The PPM, or the Prospectus, is a central document needed for your private equity fund. The PPM is the offering document that defines the terms, conditions and risk factors associated with the fund that you will offer prospective investors. In short, the PPM outlines what all investors need to know about your fund before making a decision to invest.
  • Subscription Agreement: The Subscription Agreement is a form of an application that must be filled out by any prospective investor. It provides the general partner the necessary information to determine if a prospective investor is suitable to invest in the fund.
  • Partnership Agreement: The Partnership Agreement offers the roadmap to the partnership. It details the capital contribution that will be required by investors, as well as the procedures for salaries and distributions.

Additional Documentation
In addition, other documentation needed for your private equity fund includes:

  • Custody Agreement
  • Compliance, Risk and Valuation Guidelines and Manuals
  • Due Diligence Questionnaire
  • Marketing and Website Materials

The required documentation can appear endless at times. An experienced Dallas securities attorney can help you draft all the required legal documents, as well as guide you through the process of setting up your private equity fund.

If you are looking to start a private equity fund, you should call one of our Dallas securities attorneys at the Ferguson Law Group at (972) 378-9111.

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Setting Up a Dallas Private Equity Fund

Private equity funds are different from public equity and are generally created to solicit funds for the purpose of acquiring companies. Setting up a private equity fund can be a lengthy and complicated process and there are many factors to consider when constructing your fund.

Partnership documents
The first step to setting up a private equity fund is to have your partnership documents drafted. These documents will outline the structure of your fund and will be viewed by your investors. It is imperative that these documents are structured correctly and should be drafted by an experienced attorney. A few things to note:

  • Your private equity fund will be legally structured as a partnership.
  • The operators of your private equity fund will be referred to as general partners.
  • Those who are investing in your private equity fund will be referred to as limited partners.

Investment portfolio guidelines
You will need to define your private equity fund’s investment portfolio guidelines. The following will need to be determined:

  • The type of companies the fund will be acquiring
  • The size of companies that will be pursued
  • The specific geographical regions that these companies will be located

Soliciting investors
The purpose of your fund is to attract people who want to invest. Keep in mind that most private equity funds require a minimum investment and should only be offered to accredited investors, as defined by the Securities and Exchange Commission (SEC).

There are many more legal factors to consider. An experienced securities attorney can help you draft your legal documents, as well as guide you through the process.

If you are looking to create a private equity fund, you should call one of our Dallas securities attorneys at the Ferguson Law Group at (972) 378-9111.

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