As outlined in "Private Placements: The mechanics of raising capital for your business
", when raising equity capital, one of the first things a company should do is prepare a business plan. The business plan often forms the centerpiece of the private placement memorandum (PPM), the disclosure document that is typically circulated to invest......Full article >>>
se material facts. The areas that are subject to the due diligence investigation vary from company to company, but often include:
Organizational documents (e.g., articles, bylaws, operating agreement)
Shareholder and option/warrant holder lists
Copies of agreements that affect equity holders (e.g., shareholder agreements, voting agreements, registration rights agreements)
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that may prove to be important to the success of the company.
What usually occurs is that during the due diligence process, areas that need "clean up" are revealed. If you think your company is good shape, consider these questions:
Have your key employees signed appropriate nondisclosure, assignment of inventions, and noncompete agreements?
Have you granted stock options or......Full article >>>
nvestor with an accurate picture of the company and limits the liability exposure of the company and its officers and directors.