A private placement memorandum is not required for most exempt offerings. It is prepared because the anti-fraud provisions apply regardless of exemption, and disclosure is the defense.

Contents. The offering terms; use of proceeds; the business and its market; management and their backgrounds; capitalization before and after; financial information; related party transactions; material contracts; litigation; and risk factors.

Risk factors should be specific to this business rather than generic. A generic risk factor list is worth little; a specific one identifying the actual vulnerabilities is what defeats a later claim that the risk was not disclosed.

Financial information. Whether audited, reviewed or unaudited must be stated clearly, and projections require a clear statement of assumptions and that results may differ.

Subscription documents. Investor representations on accreditation, sophistication, investment intent, receipt of information and opportunity to ask questions, and the ability to bear loss.

Consistency. The memorandum must match the pitch deck, the model and what was said in meetings. Inconsistency between them is the usual evidence in a claim.

What it cannot fix. A memorandum does not cure an unregistered offering, a bad actor disqualification, or a misstatement made orally.