Raising capital for a business can be a challenge. Business owners often look to debt or equity financing in order to raise capital to fund the desired venture. Typically, this capital is found via initial public offerings, business loans, venture capital funding and private placements, which this article will address.

Private placements are offerings of securities which are not required to be registered with the U.S. Securities and Exchange Commission (SEC), the federal regulatory agency responsible for protecting investors and securities markets. Frequently used by smaller companies or startups, private placements enable these operations to raise debt or equity from a relatively small group of investors—typically high-net worth individuals or entities—while bypassing burdensome registration requirements.

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