Private Of fering/Private Placement Sale of unregistered, restricted securities by the company.
Private Placement The sale of a security directly to a limited number of investors in a private transaction. Private Placement Memorandum Also known as an offering memorandum. A document that outlines the terms of securities to be offered in a private placement. Resembles a business plan in content and structure. Private Securities Private securities are securities that are not registered and do not trade on an exchange. The price per share is set through negotiation between the buyer and the seller or issuer. Promissory Note Debt instrument in which the maker promises to pay the holder according to its terms. Prospectus A formal written offer to sell securities that provides an investor with the necessary information to make an informed decision. A prospectus explains a proposed or existing business enterprise and must disclose any material risks and information according to the securities laws. A prospectus must be given to all potential investors. Companies offering securities, mutual funds, and offerings of other investment companies, including business development companies, are required to issue a prospectus describing their history, investment philosophy or objectives, risk factors, and financial statements. Investors should carefully read them prior to investing. Public Company A company that has securities that have been sold in a registered offering and that are traded on a stock exchange. Put Option The right to sell a security at a given price (or range) within a given time period.
109 A Practical Guide to Angel Investing: How to Achieve Good Returns
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