What are the requirements for raising capital for IPO through private placement?


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Well I am trying to raise capital for upcoming IPO's.I would appreciate for the answer of these questions.

1.What are the requirements for raising capital by Private placement memorandum process.

2.How much do lawyers,attorneys etc charge in the PPM process or is it done by concerned firm(the company I am raising money),are they responsible for getting this process or I myself have to go to lawyers,attorneys etc and is the firm/investment bank responsible for making the process?

3.How long does it take to complete all this process done.

4.I also came to know that I will have to submit a business plan first to investment banks etc,where can I find good resource of business plan on internet or what kind of business plan should I make to attract them.

Note-I am not a sophisticated investor(unexperienced) neither an accredited investor and I am trying to raise capital under regulation D,505(applicable for only 35 unsophisticated non-accredited investor).

Business Plan Investment Investors Stocks Fundraising

asked Sep 23 '11 at 21:29
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Himanshu Prasad
51 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans
  • Be aware that the business of PPM is dominated by con artists and scams. Since you say you are not very experienced, consider that maybe someone is trying to rip you off. – Alain Raynaud 9 years ago

2 Answers


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IPO is short for "Initial Public Offering ", the introduction of a company onto a public stock exchange such as NASDAQ or NYSE.

Normally the underwriting bank handling the IPO will require a proven track record of profitability. The specifics depend on stock exchange & the market conditions, but perhaps 2-5 years of profitable operation with a stable business model.

I would - respectfully - say that given the nature of your questions, I do not believe an IPO is possible for your enterprise yet.

1.What are the requirements for raising capital by Private placement memorandum process.

A phenomenal market opportunity, solid growth, real end user traction...
answered Sep 23 '11 at 23:16
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Jesper Mortensen
15,292 points
  • The requirements do vary a bit by exchange. Some of the smaller exchanges like TSX have a broader acceptance threshold, but the consequence is that you may be in the company of rogues... – Ttongue 9 years ago

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Raising capital to do an IPO is not really the way it's done. Usually the underwriting fees and other costs are simply rolled up in the transaction itself when the IPO is done. Perhaps you mean all the prep work leading up to the road show to meet with investors that will buy most of the placement?

In any case, before you set yourself on the IPO path, you should carefully consider what you're trying to achieve by doing an IPO? If you're trying simply to gain a liquidity event for early investors, you might consider private equity secondary markets like Xpert Financial or NYPPEX. If you're trying to raise capital for growth, those markets may also be a good choice. Given the regulatory environment and overhead of running a public company with the associated filings and disclosures, make sure the price you're paying in additional hurdles is worth it.

answered Oct 7 '11 at 11:27
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Ttongue
431 points

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