Private Placement Memorandum (PPM) Templates- Why To Beware Most DIY, Discount or Free Forms

A common issue faced by entrepreneurs, founders, start-ups, and other small businesses is how to get documents when they need to raise money for their venture or enter into various agreements, hire employees, or protect their intellectual property.  The cash strapped individuals often look to discount or free services online to help them do things like obtain sample templates, incorporate, or get other form documents they can use.  There are definitely times you can use these sample form templates or online services and there is a link to some document / forms websites, term sheet resources, and sample financing documents on my Top Startup Resources page.  There are private placement memorandum (commonly referred to as PPM) templates online that can give a starting point and I go over what a PPM is, why you need one, and what should be in one on this page.

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Is the traditional VC model broken?

Chris Barsness,

startup, finance, law, and tech nerd

Not broken, just needs to constantly adapt and change just like the start-ups and entrepreneurs they invest in.

Just as in any of the areas of finance, over time there are winners and losers for their return.  At the end of the day, it all comes down to all kinds of market forces, the economy, and what their LPs want.

Venture investing is a high risk and potentially high reward model.  There will continue to be changes necessary and challenges due to market forces (crowdfunding, online forums like AngelList, allowance of general advertising for certain fund raising under Reg D, etc.). 

At the end of the day, venture capital is a useful tool and is a necessary for the type of high risk investing used to start cutting edge new companies.

More on my take on the use and necessity at "Why Venture Capital is not Vulture Capital." 

http://siliconvalleystartupattor…

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Is it a good idea to publish a startup pitch deck online during or before the seed funding process?

Chris Barsness,

startup, finance, law, and tech nerd

One other issue people don't think about is the legality.  If you put something online to promote your company for the purpose of getting investors, that could be considered an general offer to sell a security through general advertising or solicitation, which is prohibited in most cases under federal and state securities laws.  That is especially the case if you put something like "our company is looking for $100,000 for 5% in the company" on the net.

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Why Venture Capital is not “Vulture Capital”

There is this feeling among many founders and entrepreneurs that venture capital is the “dark side” and inherently evil.  I have been very surprised to hear things like “we don’t want to go down the road with Vulture Capital” in the heart of venture capital in places like San Jose, Menlo Park, Mountain View, San Francisco, and Palo Alto.  While I do agree that there are some bad apples, negative aspects of VCs and VC funding, and a general perception of VCs as sharks, I would argue that VCs are an invaluable part of the US economy and the use of VC funding has been extremely useful in the growth of many successful US companies.

Part of the problem is that people don’t understand exactly what VCs do and how VC works.  The public only hears about a VC firm making billions off of an IPO and how VCs are like vultures that swoop in and take over the company and get rid of all existing employees.  You can read my take on issues of company founders having a hard time giving up control here, but giving up some control is required in many situations to bring in the capital to make the company grow.  Investors put money into a company to make money, not to make the world a better place.  That is business 101.

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