Re(1): investor documents Posted on July 27, 2011 at 08:05:03 AM by John Cones
If the retired attorney is not going to prepare the offering materials for you, I'd suggest you ask him to limit his advice to those areas where he has bona fide expertise. The purpose of preparing a disclosure document for prospective investors is not for their convenience, but for your protection. Besides, any good PPM will contain a 2 to 3 page summary of the offering and a good table of contents, so that if certain prospective investors don't want to read the entire document, they can just hit the summary, a few bios, the synopsis, estimated use of proceeds or whatever interests them. Your obligation is to disclose in writing all material aspects of the transaction. The securities attorney actually responsible for the offering will use his or her experience and judgment to determine what disclosures are needed. The PPM should be completed and provided to each prospective investor, along with subscription agreements prior to the investment. The LLC operating agreement is usually included as exhibit "A" to the PPM. In my practice, I do not have the articles of organization (i.e., certificate of formation) for the LLC filed until after the minimum offering proceeds are raised.