PPM Attorney
Private Placement Memoranda, Flat Fee
A private placement memorandum is the document investors rely on and the document regulators and plaintiffs read first when something goes wrong. A good PPM protects the company by telling investors, plainly and specifically, what they are buying and what could go wrong. A template PPM with your name dropped in protects no one.
Frederick M. Lehrer drafts PPMs and the supporting offering documents for Regulation D raises. As an attorney in the SEC's Division of Enforcement from 1991 to 2000, he saw how offering documents look when they are exhibits in a fraud case. He drafts with that reader in mind. PPMs are quoted as a flat fee before work begins.
What a Complete Offering Package Includes
The PPM itself: a description of the company and its business, the terms of the securities, use of proceeds, management and compensation, capitalization and dilution, related-party transactions, and risk factors specific to your company rather than copied from someone else's.
The supporting documents: a subscription agreement, investor questionnaire, accredited investor verification procedure for 506(c), the operating or shareholder agreement terms the investors are buying into, and the Form D and state notice filings that follow the first sale.
Where PPMs Fail
Generic risk factors are the most common failure. A risk factor that says the company 'may' face competition, when the company has already lost its largest customer, is not a disclosure; it is evidence. The second failure is use of proceeds — describing a plan for the money and then spending it differently without telling investors.
The third failure is the gap between the PPM and everything else the company says: the deck, the website, the founder's conversations with investors. If the deck promises returns the PPM does not support, the PPM's careful language will not save the offering.
Choosing Between Rule 506(b) and Rule 506(c)
Rule 506(b) allows up to 35 non-accredited but sophisticated investors and prohibits general solicitation. If any non-accredited investor participates, the disclosure requirements increase substantially, including financial statement requirements. Rule 506(c) allows public advertising, but every purchaser must be accredited and the company must take reasonable steps to verify it.
The right choice depends on how you plan to find investors. Fred will ask that question first, because the marketing plan decides the exemption, and the exemption decides what the PPM has to say.
| Area of Scrutiny | What the Staff Looks For |
|---|---|
| Specific risk factors | Risks tailored to this company, including risks that have already happened |
| Use of proceeds | A realistic plan, and disclosure of discretion to change it |
| Management compensation | Salaries, fees, and related-party payments stated plainly |
| Dilution and capitalization | What investors own after the raise and after conversions |
| Consistency | PPM, deck, website, and verbal pitch telling the same story |
| Exemption fit | 506(b) or 506(c) chosen to match how investors are actually found |
| Bad actor diligence | Rule 506(d) checks on every covered person |
| Form D and blue sky | Federal and state notice filings made on time |
- Attorney, SEC Division of Enforcement, 1991–2000
- Private placement memoranda for Reg D 506(b) and 506(c) offerings
- Subscription agreements, investor questionnaires, and verification procedures
- Form D and state notice filings
- Regulation A offering circulars for larger raises
Matters are described generally and without client-identifying detail. Prior results do not guarantee a similar outcome. A full list of representative matters is available on the case list.
Private Placement Memorandum (PPM) Drafting
- Startups and growth companies raising a seed or Series A round under Reg D
- Real estate, energy, and fund sponsors raising from accredited investors
- Companies whose current PPM is a template that no longer matches the business
- Issuers moving from 506(b) to 506(c) to advertise their raise
- Your PPM was adapted from another company's offering
- The deck promises returns the PPM does not mention
- You plan to advertise the raise but are relying on 506(b)
- Proceeds are already being spent differently than described
- PPM drafting and updates
- Subscription agreement and investor questionnaire
- Accredited investor verification procedures
- Form D and state notice filings
- 1. A call with Fred about the business and how you will find investors
- 2. Exemption choice and a flat-fee quote
- 3. Drafting with your team, then review
- 4. Filings and support through closing
PPMs and offering packages are quoted as a single flat fee before work begins. Larger document projects like PPMs sit outside the monthly retainer but are still flat-fee. The next step is a confidential conversation with Frederick M. Lehrer about your facts and timeline — no forms, no intake queue.