In today’s private lending environment, raising capital through mortgage funds, pooled investment vehicles, or note offerings is more common than ever. But whether you’re structuring a Regulation D offering or building a real estate fund, one legal document remains foundational to compliance and investor trust: the Private Placement Memorandum (PPM).
At Geraci LLP, we help private lenders develop customized PPMs that not only meet legal standards, but also demonstrate professionalism, transparency, and credibility to potential investors.
What Is a Private Placement Memorandum (PPM)?
A Private Placement Memorandum (PPM) is a legal disclosure document used in private securities offerings to inform prospective investors about the terms, risks, and structure of the investment.
It is commonly used under Regulation D exemptions (506(b) or 506(c)) and serves to:
- Disclose material facts and risks
- Outline investment structure and returns
- Protect sponsors from securities fraud claims
- Satisfy both federal and state disclosure requirements
Important: Even if you’re only offering securities to accredited investors under an exemption, you are still subject to the SEC’s anti-fraud rules — and a well-drafted PPM helps ensure compliance.
What Does a PPM Include?
- Executive Summary
Overview of the offering, issuer, and investment goals.
- Risk Factors
Clear, specific risks relating to the market, business model, regulatory environment, and potential conflicts of interest.
- Use of Proceeds
How investor capital will be used (e.g., making loans, operating expenses, reserve funds).
- Investment Terms
- Minimum investment amounts
- Projected returns or preferred returns
- Profit splits and waterfall structures
- Withdrawal/redemption rights
- Offering Structure
Details about the legal entity (LLC, LP), fund manager, and control rights.
- Securities Exemption Disclosure
Explanation of which Regulation D exemption applies (506(b) or 506(c)).
- Management Team Bios
Background information and experience of the fund managers or loan originators.
- Subscription Process & Investor Qualifications
Accredited investor verification, how to subscribe, and legal disclaimers.
- Conflicts of Interest & Fees
Transparency around any potential conflicts, fees paid to managers, brokers, or affiliates.
- Tax and ERISA Considerations
Overview of tax treatment for investors and any ERISA plan investor limitations.
Why You Need a PPM — Even If You Think You Don’t
Some private lenders mistakenly believe that having a small number of investors, or knowing them personally, removes the need for a PPM. This is a dangerous assumption.
- Limit liability by disclosing all risks
- Prove compliance in the event of a regulator audit
- Protect your offering from investor disputes
- Demonstrate professionalism to sophisticated investors
How Geraci LLP Adds Value in PPM Drafting
With 15+ years serving the private lending industry, Geraci LLP brings unmatched legal and business insight to every PPM we prepare. We don’t just draft — we strategize and structure to protect your offering and enhance its appeal.
Our PPM drafting services include:
- Offering structure consultation
- Securities exemption selection
- Customized risk disclosures
- Drafting of Operating Agreement / Subscription Documents
- Investor onboarding materials
- Blue Sky notice filing support
- Ongoing support for updates, amendments, and renewals
Whether you’re launching your first real estate fund or expanding your existing platform, we’ll help you raise capital the right way.
Pro Tip: When to Start Drafting a PPM
Start early — before you talk to investors, before you hold a webinar, before you circulate a pitch deck. Engaging Geraci LLP at the planning stage ensures you don’t accidentally trigger securities law violations.
Need Help Drafting a PPM?
If you’re planning a capital raise, forming a mortgage or real estate fund, or launching a private debt platform, don’t skip the most important legal document.
Contact Geraci LLP to schedule a consultation and ensure your Private Placement Memorandum is accurate, compliant, and investor-ready.
