When considering Private Placement investments you need to consider various risks including the following:
Your investment may lose value – The notes and or private placements you are investing in are speculative ventures that are looking to develop or re-develop property and many times they do not have a proven track record.
Your investment may be illiquid – By investing in private placements you are required to hold on to the stock for at least one year before you can sell it. At that time there might not be an investor that is interested in your stock so you might not be able to sell. By investing in a note you are not required to hold the note for any specific time period but and it may be sold at any time, but there may not be a buyer interested in your note, or you may have to discount the note in order to sell it.
Private Placement companies are not required to report on their financial status quarterly like public companies – The companies that we place on the website have committed to us that they will update their shareholders and lenders with how the company is performing but there is no guarantee that they will.
Private Placement companies are not subject to the same regulatory requirements as a public company – When a company goes public they are required to disclose specific information in a 10K as well as must they must adhere to the Sarbanes-Oxley Act which a private company does not have to do.
A PRIVATE INVESTMENT’S OFFERING MEMORANDUM (PPM) DESCRIBES THE VARIOUS RISKS AND CONFLICTS OF INTEREST RELATING TO AN INVESTMENT IN THE SPECIFIC OFFERING AND TO ITS OPERATIONS. YOU SHOULD READ THE OFFERING MEMORANDUM CAREFULLY TO DETERMINE WHETHER AN INVESTMENT IS SUITABLE FOR YOU IN LIGHT OF, AMONG OTHER THINGS, YOUR FINANCIAL SITUATION, NEED FOR LIQUIDITY, TAX SITUATION, RISK TOLERANCE AND YOUR OTHER INVESTMENTS.
KEEP IN MIND THAT THE PAST PERFORMANCE OF ANY INVESTMENT IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. YOU SHOULD ONLY COMMIT RISK CAPITAL TO AN INVESTMENT WHICH MEANS MONEY THAT YOU CAN LOSE. PRIVATE PLACEMENT INVESTMENTS ARE NOT FOR EVERYONE AND ENTAIL RISKS THAT ARE DIFFERENT FROM MORE TRADITIONAL INVESTMENTS. YOU SHOULD OBTAIN INVESTMENT AND TAX ADVICE FROM YOUR ADVISERS BEFORE DECIDING TO INVEST.
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