ShmoopTube

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finance a la shmoop what is a private placement okay a placement means that a [Man discussing private placement]

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company is placing its shares with some new owner in return for cash that is

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it is placing ownership in return for capital so what's the most famous type

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of public placement all right come on spell it come on with me now yes IPO so

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if that's a public placement it's private kiss and cousin private [People in a car cuddling]

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placement is almost the same thing all be it with fewer rules about disclosure

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and structure and a bunch of other regulatory stuff in fact a private

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placement is also called a regulation D placement...Such that

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securities are not registered with the state or the SEC the way they would be

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in a public offering in a public offering securities can be sold to [Group of people in public securities]

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pretty much anyone who has the dough to buy the shares and is qualified...

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....No restrictions or requirements

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because the government's done all the filtering but in a private offering the

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Securities can only be sold to what is called accredited investors that is

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investors sign a piece of paper that warrants and represents that they're [Wealth verification document signed]

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wealthy enough to lose all the money they're putting into this investment

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like they have over a million bucks in assets and a few hundred grand a year or

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more and education and all that and that they're smart enough to have known not

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to do this investment in the first place should things go awry think no training [Boy riding a bike]

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wheels, no railing, no ambulances or cops or firemen you're on your own here in a

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private placement there baby and yeah good luck [Man sitting by a bus stop and bus arrives]

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