top of page
Search

Exploring Private Placements for Tech Investors: A Beginner's Guide


For tech investors, private placements offer an intriguing yet often overlooked opportunity. While many investors are familiar with traditional public offerings like IPOs, the realm of private placements remains underexplored by most. This guide aims to demystify private placements and show how tech investors can gain access to these exclusive, potentially lucrative global investment opportunities.


A private placement involves the direct sale and issuance of securities to a select group of investors rather than the general public. Unlike an IPO or a secondary market purchase, private placements are typically targeted at accredited investors such as sophisticated, institutional, and professional investors, as defined by Section 708 of the Australian Corporations Act.


For tech companies, raising funds through private placements can provide the necessary capital for various purposes, including R&D, scaling operations, acquiring new technologies, or improving their balance sheets. Companies often offer these new shares at a discount to the current market price to incentivise investment, making them attractive opportunities for investors.


Private placements are considered excluded offers, meaning they do not require a disclosure document like a prospectus. Section 708 of the Corporations Act outlines the categories of investors eligible for these offers. For most tech investors, the focus will be on the Sophisticated Investor and Offers through a Financial Adviser sub-sections.


To qualify as a Sophisticated Investor, an individual must have net tangible assets exceeding AUD 2.5 million or a gross income of at least AUD 250,000 for the past two years. Certification from a qualified accountant, dated within the last six months, is required. Alternatively, an investment of at least AUD 500,000 in the company seeking funds can also meet the criteria. If an offer is made through an Australian Financial Services Licence (AFSL) holder, the investor must demonstrate sufficient experience in securities investing. This involves assessing the merits, value, risks, and information needs related to the offer. The AFSL holder will then issue a statement confirming the investor's eligibility, which must be acknowledged and signed by the investor.


While the process may seem daunting, it is generally straightforward and quick. Once deemed an Experienced Investor, the financial services firm will provide the necessary documentation. Some firms may restrict offers to sophisticated or professional investors only, often due to regulatory caution.


Titan Securities, an Australian-owned financial services company with over seventeen years of operation and twenty-five years of experience, specialises in private placements, IPOs, and retail / wholesale investment advice. We offer personalised services beyond mere investor newsletter subscriptions, ensuring our clients receive tailored support and guidance.


For tech investors interested in exploring private placement opportunities in Australia and overseas, visit www.titansecurities.com.au. We're here to help you navigate and capitalise on these exclusive investment avenues.


To stay updated on upcoming pre-IPO and seed share offers, join our Pre-IPO Tech Investor Syndicate by completing the Google form at Pre-IPO Tech Investor Syndicate Form. We are a group of individual Australian wholesale and sophisticated investors targeting pre-IPO/startup tech companies. Fill out the form to receive email notifications of new opportunities.


Matthew Corica is a full-time private trader and adviser at Titan Securities Pty Ltd | AFSL: 307040. This article is for educational purposes only. For further information and to satisfy any disclosure obligations, please refer to our standard risk disclaimer at www.titansecurities.net/disclaimer.


Are you ready for potentially explosive profits? Seeking a stock market strategy that could maximise your risk capital? Your search ends here!


Discover our dynamic Hang Seng strategy today:

46 views0 comments

Comments


Commenting has been turned off.
bottom of page