A PPM is the legal document you give to your investors so they have all the information they need to make an informed decision about investing in your project. Some syndicators decide to skip this step to avoid the upfront costs and to avoid revealing all the risks and conflicts of interest that are required. However, if you’ve created a security, you risk legal action from the SEC as well as investors if you fail to provide the private placement memorandum. Following the SEC rules is not that difficult if you employ a registered securities attorney to advise you and develop your documents. This video will explain the parts of the PPM, how you create a security, and how to get an exemption from filing with the SEC.
Disclaimer: I am not an attorney and this is not to be construed as legal advice. Always consult appropriate counsel when pooling money for an investment.