Time to raise another venture capital or private equity fund? What’s on your to-do list?
✓ Purchase an awesome new suit for presenting to investors. (Fun!)
✓ Assemble all the latest performance numbers. (Or have an associate do it.)
✓ Check in with the lawyers. (Not the worst thing in the world.)
✓ Write a new private placement memorandum. (No! Anything but that!)
Why do people dread working on a private placement memorandum (PPM)? Because writing a good PPM is hard. A PPM can’t be breezy. And you don’t want to write yet another dry and impenetrable investment document. PPMs are formal documents in an increasingly informal world.
Embrace the formality—and I’m not just referring to tone. Difficult documents are actually easier with a formal writing process. The process keeps you progressing through blocks, saving time in the long run.
Here’s how the Content Bureau typically manages PPM projects:
- Gather the background info. Assemble all your recent communications, such as annual reports and investor communications, and interview other people in your firm. Take detailed notes as you interview partners.
- Review all the background info. As you read, make lists of points you’d like to include and where to find them. Try to eliminate info gaps before you start writing.
- Create a detailed outline. “Detailed” means including all the key messages and supporting points for everything you want to convey in every section. The more detail the better.
- Edit the outline. Try to get another partner to review the outline, too. That person won’t want to spend time on the PPM at this early stage, but it will save everyone time later.
- Write your PPM. It’s all there. You just need to follow the outline.
- Secure feedback. Ensure that all who will need to ultimately approve the PPM review the copy at this stage. Incorporate their feedback.
- Edit. We recommend calling in a pro (perhaps the Content Bureau) to edit your entire PPM so it’s clear and polished.
- Review and send to layout. Have your lawyers bless (or revise) the portions of the PPM you wrote, have your partners approve the entire document, then send your fully approved copy to layout.
While your legal team will handle writing all the legalese and sections about terms, risks, and taxes, writing a couple of dozen pages that tell your firm’s story is still a time-consuming process. Please call us if you need help with the writing—or any other aspect of creating your PPM. We can lead a messaging exercise if you’re ready to refresh your story. Or we can just edit your draft PPM and create a great design to showcase the final version.
No matter how much or how little you write yourself, a little formal planning will keep your venture capital or private equity PPM on track.
Want to learn more about our PPM work? Read this case study featuring our client, ABS Capital.