In order to raise capital from investors, an offering memorandum is frequently required. Over 5,000 offering memorandum and prospectus documents have been created and implemented by the Goldwin.associates team in over 50 jurisdictions around the world. We can ensure that your offering memorandum is properly formatted.
The OM, also known as the "offering memo," is a document that details the sale of the company's securities. A document of this type would include detailed information on the company's securities being offered, the pricing of the securities, the company's market, the management team, and much more. The offering memorandum is a comprehensive document that, if warranted, can be given to an investor as a single document to provide information needed to make an investment decision.
An equity offering memorandum is frequently used for companies selling shares such as common stock or common shares, as well as for various funds such as hedge funds or mutual funds. When a company sells an ownership stake in another company, this is referred to as an equity transaction. While this is true for many public transactions via an IPO – where buying stock on the open market makes you a part owner of the company – it is not always true for funds. Funds such as hedge funds may sell equity in the form of participating shares (or even multiple classes of shares), but this does not necessarily grant the investor ownership or even voting rights. A document must be provided to an investor in order for them to make an informed decision about investing in all private transactions involving the sale of securities. While the prospectus and private placement memorandum are two examples, the offering memorandum is also frequently provided.
An offering memorandum is required for companies that issue debt securities such as bonds, convertible bonds, notes, debentures, and other types of securities. The OM will specify the amount being raised, the maturity date, interest rates, and a variety of other variables and characteristics, including, if necessary, information on clearing and settlement and depository services.
The term "offering memorandum" is widely used and understood around the world to refer to a document known as a "memorandum" that details what the company is "offering" in exchange for investment capital. When you read it backwards, you get "memorandum offering" (i.e. a document detailing the offering of securities). A prospectus, an offering circular, a private placement memorandum, and a "red herring" are the most common terms for such a document, in addition to "offering memorandum."
Finally, each offering memorandum will include the subscription agreement, which is a contract between the investor and the company selling securities. The subscription agreement outlines the terms, has numerous places for the investor to fill out, and usually includes instructions on where to send a check or bank wire details for subscribing to the securities. The subscription agreement is also very important to the offering memorandum, and in many cases is referred to as the "shoes" of the documents, while the rest of the memorandum is referred to as the "clothes." To put it another way, if there is no subscription agreement, there can be no transaction between an investor and the company.
The Goldwin.associates team of consultants and lawyers can assist you in drafting your offering memorandum for either debt or equity issuance in an efficient, timely, and cost-effective manner.
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