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Private Placement Memorandums and Direct Public Offerings, the most common mistakes made. When gearing up to raise capital it is typically a business owners first instinct to simply throw together a business plan and find the cheapest company to put together the private placement memorandum and then seek funding. What these professionals don’t realize is that they are doing things in reverse and often times a PPM is not a standalone solution to financial needs.

The first problem is the most companies will first write a business plan and cheap PPM and look for a capital solutions last, when strategically speaking, one should first find a full service solution who has a database of investors ready to fund properly structured corporations with well authored business plans and private placement memos. After you find a company that has a ready network of seasoned investors you will often find that this firm will also structure your business and documents so that you are able to attract the attention of these investors. Next, don’t make the mistake of hiring just anybody to write your biz plan. You need to find a professional author who is well rooted in the art of technical writing and has a solid comprehension of your industry.

Now it’s time to write the PPM. Here is a warning that will most likely go in one ear and out the other but you must never choose the cheapest service for your PPM you will regret it and this is a guarantee. Investors see these documents all day everyday and they know a template when they see it. Don’t believe for a second that you will get a viable private placement memo that will actually achieve funding for anything less than $3,000; it’s just not going to happen. There is too much work involved in putting a fund-able strategy together and you’ll never find an experienced firm to do it for cheap.

The moral of the story is to first find an investor finder solution with a solid network of investors, second have this company write your business plan and private placement memorandum to fit the needs of their investor base and lastly, talk to this consultant about helping you perform a DPO (Direct Public Offering) to their group. This is what separates the men from the boys in the venture capital consulting industry.

Legitimate consultants who stand behind their work will take your PPM directly to their investor base and help you raise capital quickly. In return for this service the company may want a modest equity position in addition to their fee but it is always worth it and typically they will take the final step and have their investors pay to take your company public. This is the ultimate for any company that is seeking a long term funding solution.

Remember the order: 1. Find an investor finder 2. Have that company write your biz plan and PPM 3. Convince the firm to perform a DPO for fast funding 4. Offer some equity to sweeten the pot so that they take you public!

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If material information is not included relating to climate change issues, SEC corporate filings will now be seen as incomplete. This is an important conclusion as part of “interpretive guidance” given to us by the Securities and Exchange Commission at the end of January. This change came about as a result of pressure from investor organizations and public figures, who felt that companies tend to overlook information related to climate change. This information is very important as it affects the judgment and decisions of investors.

If they didn’t know it already, companies are certainly finding how important climate related issues are to their existence. We can already see that some jurisdictions are expecting to introduce legislation to force companies to cut back on their energy use and consequently cut back on their carbon emissions. The EPA, in the United States, has found that greenhouse gases are dangerous to public health and this is undoubtedly going to lead to additional action to force carbon reductions.

SEC “corporate filings” notifications are rare but very important as they put a lot of emphasis on the accuracy of company reports. If a company does not reveal its true position, investors may not be in possession of the necessary facts to enable them to make decisions and this could lead to action.

Corporate disclosure reports may be composed by reference to the information contained within the regulations set out. The SEC corporate filings guidance, by definition, requires companies to pay closer attention to material climate related issues. We have to see how these issues could affect the company.

We can clearly see how climate related issues could affect a company from several different standpoints. When climate change causes weather pattern alterations, this could affect the operation of a specific company, its supply chain, its product distribution or any combination of circumstances. If a company is aware of such potential (as it must be for its ongoing planning purposes), it must detail this position within its reports. An investor could make a strategic decision whether to put funds into the company based on the scale of this threat, for example.

Several prominent investor groups came together to send three different petitions to the Securities and Exchange Commission seeking action. Organizations such as Ceres were quick to point out that a good number of S&P 500 companies were not adequately revealing climate related issues. The investors were adamant that change was needed and filed petitions with the SEC during 2007, 2008 and 2009 before action was recently taken.

Whenever SEC corporate filings guidance is revealed, company senior management must take notice. While legal interpretation of the law may not be altered as such, it is certain that if the company does not pay attention to climate related issues and reveal a position, industry watchdogs will do so for them.

Climate related issues pose both risks and opportunities for companies of all sizes. Companies must ensure that they strive to attain a position of sustainability and know how they will address these threats, while embracing any opportunities to best effect. The SEC corporate filings clarification will put all companies on the same level

Daniel Stouffer has a lot of information about SEC corporate filings and why a visit to www.verisae.com can aid you.