Placement

What is a 'Placement'

A placement is the sale of securities to a small number of private investors instead of to the general investing public. A placement is exempt from registration with the Securities and Exchange Commission under Regulation D, as are U.S. government and federal agency issues, municipal and state issues, insurance policies, fixed annuities, and small public offerings. Because of this exemption, a placement can be a simpler and less expensive way for a company to raise capital than a public offering.

BREAKING DOWN 'Placement'

Unlike with a public offering, a formal prospectus does not have to be provided for a private placement, though the information that would be contained in a prospectus must still be available. The buyers in a private placement will usually be large, sophisticated investors such as investment banks, investment funds and insurance companies. The public may not be aware of a placement until it has been completed.


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RELATED FAQS
  1. What factors might make a private placement a risky investment?

    Learn about purchasing securities through a private placement investment, and understand the risk factors associated with ... Read Answer >>
  2. What is the difference between an IPO and a private placement?

    Learn the differences between private placements and initial public offerings that companies use to raise capital through ... Read Answer >>
  3. How does private placement affect share price?

    Understand what it means when a company does a private placement, and learn how this typically impacts the share price of ... Read Answer >>
  4. What are some advantages of raising capital through private placement?

    Understand how a business can raise capital through private placement and the benefits business owners receive through this ... Read Answer >>
  5. What is required to become an accredited investor in a private placement?

    Learn how the SEC defines accredited investors, and understand exceptions to the requirements for an accredited investor ... Read Answer >>
  6. What are the disclosure requirements for a private placement?

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