(2) [the buyer” and, together with all other purchasers of the bonds, according to the sales contracts entered into at the time of the order, the “buyers”). Raising money for private companies can be a frustrating and stressful experience. Without the type of public access to investing enjoyed by a public company and the type of restrictions that can be invested in many types of private placements, it can be discouraging to find suitable investors. It can also be expensive, not only in terms of money, but especially in terms of time and effort that you and your employees could otherwise invest in finding new customers, improving business processes or creating new products. For those who wish support in the fundraising process, it is possible to hire a registered broker-dealer who acts as an investment agent for the offer. This blog discusses the role of mediation officers in the fundraising process. What is a mediation officer and what can they do? In essence, a broker is a registered broker (a “BD”) that assists the company offering the securities (the “issuer”) by linking them to qualified investors who may be interested in purchasing the issuer`s securities. One of the main advantages of using an investment agent is the ability to quickly access potential investors with whom the investment officer has a pre-existing relationship. From its long list of qualified investors, the agent can help identify potential investors who may be interested in this specific investment opportunity. This ability to identify qualified potential investors and reach out to those who are most likely to invest increases the chances that the company will be able to increase the capital sought.
In addition, dependence on the agent`s existing investor relationships helps the issuer avoid violations of general advertising and advertising restrictions when conducting a private placement in accordance with Rule 506 (b). A related function of the investment officer in a private placement is to assist the issuer in preparing and distributing its private placement brief (a “PPM”) to potential investors. The PPM is a disclosure document made available to potential investors and performs a function similar to that of a prospectus during a registered IPO (this document is sometimes referred to as an “offer circular” or “offer memorandum”). The PPM contains essential information about the company, such as its history and description of the company`s activities, financial data and investment risks. Like a prospectus, the PPM serves as both a marketing document and a liability reduction document and is therefore of paramount importance for private placement. The assistance of a serious mediator in the development of this document can be of great benefit to the company. With regard to the company`s assistance in the preparation of PPMs, the mediator can also, in general, provide support in his marketing and fundraising efforts.