Private Placement Offerings (PPO)

A Private Placement is the sale of an issue of Debt (Loan) or Equity (Stock) securities to a limited number of buyers that are qualified as Accredited Investors. The Placement is generally made by an Investment Banker, who acts as an Agent of the Issuer, bringing together the Issuer (business or corporation) and the Buyer(s) (Accredited Investor(s)).

The Accredited Investor may be an individual, an entity (business or corporation), or an Institutional Investor (Mutual Fund, Bank, etc.), Pension Fund or Insurance Company. Because of the sophistication and experience of these investors, the securities offered in a Private Placement are exempt from the registration requirements of the Securities and Exchange Commission and most states.

A Bridge Loan is generally defined as a short-term, or emergency financing that "bridges" the need for capital between the Private Placement and longer term financing (in most cases, an Initial Public Offering or IPO). The corporate financing methods used and amount of capital raised may vary from case to case. Typically, the corporate financing sequence for a start-up company may go as follows:

Example: