Structuring The Private Placement Or Venture Deal – Part 1

Back in 2013 I wrote a series of blogs about preparing for and then structuring a private placement or venture deal.  In today’s world where public markets are more difficult to access for smaller companies, it is a topic worth revisiting.  There are three primary aspects to the private placement or venture capital arena.  The first is getting dressed for the ball – i.e., preparing a company to be viewed and assessed by investors including the due diligence process; the second is determining valuation or deciding to avoid a determination through convertible instruments; and the third is structuring and documenting the deal itself.

In this two-part blog series I will discuss each of these aspects.  This first part addresses pre-deal considerations including valuation considerations.  Part two will address structuring and documenting the deal.

Although structuring a private placement and negotiating with a venture capital group are very different, the underlying mechanics of investments are universal.  In a venture capital