Chapter 6 Private Placements One financing strategy that is available to early-stage and emerging-growth companies is the private placement offering, which generally refers to an offer- ing of securities by a small or growing company that does not need to be regis- tered with the Securities and Exchange Commission (SEC). A private placement can offer you (as the "offeror" or "issuer") reduced transaction and ongoing costs because it is exempt from many of the extensive registration and report- ing requirements imposed by federal and state securities laws. Private place- ments usually also offer the ability to structure a more focused and dynamic transaction, because they attract a small number of sophisticated investors. These investors may also provide the company with certain strategic benefits 115 American Management Association www.amanet.org