Private Placement Memorandum Checklist: 22 Items to Confirm Before You Send It to Investors

A private placement memorandum checklist is a pre-send review that confirms your PPM matches the securities exemption you rely on, discloses every material risk, and ties out to your financial model and deal documents. Run it before a single investor sees the document. Most PPM problems show up later as regulatory exposure or as fraud claims under Rule 10b-5, and both cost far more to fix than an extra week of review.

Below are 22 items, grouped into five blocks. Use them in order as a step by step pass with your securities counsel, then file the signed-off checklist with your data room records.

Private Placement Memorandum Checklist, Part 1: Exemption and Investor Eligibility (Items 1 to 5)

Every disclosure choice in a PPM depends on which exemption you use. If you get the exemption wrong, the rest of the document sits on a bad legal footing.

Exemption named and consistent. State whether you rely on Rule 506(b), Rule 506(c) or Section 4(a)(2), and make sure the cover page, the subscription agreement and the Form D all match. In December 2024 the SEC settled with three issuers (two private companies and one registered adviser sponsoring private funds). Each had used general solicitation, which put them under Rule 504 or 506(c) and made the Form D filing mandatory. None of them filed on time, according to Morrison Foerster's January 2025 summary.
Solicitation method matches the exemption. If anyone posted the raise on LinkedIn, spoke about it on a podcast or pitched at an open demo day, assume you are in 506(c) territory and treat the offering that way.
Accredited investor definition is current. For individuals the thresholds are $200,000 of income ($300,000 jointly with a spouse or spousal equivalent) in each of the two most recent years, or $1 million of net worth excluding the primary residence. Holders in good standing of the Series 7, 65 or 82 licenses also qualify (Nasdaq). Investor questionnaires drafted before the 2020 amendments often leave out the license and spousal-equivalent paths.
506(c) verification method chosen. On March 12, 2025, SEC staff issued a no-action letter to Latham & Watkins. Under it, a written representation plus a minimum investment of $200,000 for individuals, or $1,000,000 for entities qualifying on total assets, can count as reasonable verification steps (Seward & Kissel). If you use this route, put the minimum in the PPM terms.
Non-accredited investor decision made. Rule 506(b) allows up to 35 non-accredited purchasers. Once one of them buys, Rule 502(b) requires disclosure close to what a Regulation A offering would carry, including financial statements (Varnum LLP). Most issuers decide to sell to accredited investors only and say so on the cover.

Action step: write the exemption and the investor-eligibility rule on a single line at the top of your checklist. Every later item gets checked against that line.

Part 2: Bad Actor Screening and Disclosure Integrity (Items 6 to 11)

This block is where issuers get into fraud trouble. Theranos is the reference case. In March 2018 the SEC charged the company, Elizabeth Holmes and Ramesh "Sunny" Balwani with raising more than $700 million through false statements about the company's technology, business and financial performance. Among the alleged claims were that its products were used on the battlefield in Afghanistan and that it would make $100 million in revenue in 2014 (SEC press release 2018-41; NPR, March 15, 2018). All of that money was raised privately.

Bad actor questionnaires collected. Rule 506(d) blocks you from using Rule 506 if a covered person has a disqualifying event after September 23, 2013. Covered persons include directors, executive officers, owners of 20% or more of voting power, promoters and compensated solicitors. Criminal convictions carry a 10-year look-back (5 years for the issuer itself), per the SEC's small entity compliance guide.
Pre-2013 events disclosed. Rule 506(e) requires a written description of older events, given to purchasers a reasonable time before the sale. Put it in the PPM so the timing question never comes up.
Every factual claim has a source file. Each customer name, contract value, patent, partnership and headcount figure in the PPM should link to a document in the data room. Unsupported claims are what turned Theranos into a fraud case.
Risk factors are specific to this company. Generic boilerplate ("the company may need additional capital") doesn't protect you much. Name the specific customer concentration, key-person dependency, regulatory approval or covenant that could hurt investors.
Conflicts of interest and related-party deals listed. Fees paid to affiliates, management loans and principal transactions belong in a dedicated section. In 2026 the SEC charged Adit Ventures Management and CEO Eric Munson, alleging that the firm misstated the cost of pre-IPO shares it sold to its own funds and charged unauthorized acquisition fees (SEC press release 2026-73).
Use of proceeds is itemized. Give dollar amounts or percentages by category and include any amounts going to insiders. If management has discretion over more than a small slice, say so plainly.

Action step: build a two-column "claim to source" table in an Excel template. Column A holds each factual sentence from the PPM and column B holds the file path that proves it. Anything without a column B entry gets cut.

Part 3: Financials and Projections (Items 12 to 15)

Investors will rebuild your numbers. If the PPM figures don't match the spreadsheet model in your data room, you lose credibility on the first diligence call.

Historical financials match the source. Revenue, EBITDA and cash figures in the PPM should tie to the penny to your audited or reviewed statements. For non-reporting issuers raising up to $2 million and selling to non-accredited investors, Rule 502(b) requires only the balance sheet to be audited, and it must be dated within 120 days of the start of the offering (Strictly Business Law Blog).
Projections are labeled and assumption-driven. Mark every forward-looking figure as a projection, list the assumptions that drive it (growth rate, churn, pricing, hiring plan) and add a forward-looking statements legend. Theranos's projected $100 million of 2014 revenue is the example of a projection that became evidence.
Capitalization table is pro forma. Show the cap table before and after the raise, including option pool expansion, convertible notes or SAFEs converting at this round, and warrants. Investors should be able to calculate their fully diluted ownership straight from the PPM.
Valuation basis stated. Say how the pre-money valuation was set (a priced lead investor, a 409A, comparables) and whether any related party took part in setting it.

Action step: link the PPM's financial tables to your financial model's output tab, then lock both versions with the same date stamp before sending.

Part 4: Terms and Deal Documents (Items 16 to 19)

The PPM summarizes the deal, but the operative documents control it. A mismatch between the two gives an investor a ready-made rescission argument.

Term summary matches the operative documents. Check price per share, liquidation preference, conversion terms, anti-dilution, dividends, voting rights and redemption against the charter, the LPA or the note.
Minimum and maximum raise defined. State the minimum close amount, whether funds sit in escrow until it is reached, the maximum size, the closing deadline and any extension rights.
Transfer restrictions explained. Securities sold under Regulation D are restricted. Spell out the holding period, the restrictive legend and any right of first refusal so nobody buys expecting liquidity.
Subscription package complete. The package needs a subscription agreement, investor questionnaire, W-9 or W-8, wiring instructions sent through a verified channel, and signature pages. Check that every cross-reference in the PPM points to a document that actually exists in the package.

Action step: have someone outside the drafting team read the PPM term summary next to the operative documents, line by line, and initial each matched term.

Part 5: Private Placement Memorandum Checklist for Filing and Distribution (Items 20 to 22)

The last three items cover what happens once the document leaves your hands.

Form D calendar set. Rule 506(b) and 506(c) offerings require a Form D within 15 calendar days after the first sale. The first sale is the date the first investor becomes irrevocably committed to invest, and a deadline that lands on a weekend or holiday moves to the next business day (Hamilton & Associates, August 2026). Also diary state blue sky notice filings, which follow their own fee schedules.
Distribution log kept. Number each copy of the PPM and record who received it, on what date and through which channel. A numbered log supports a 506(b) "pre-existing relationship" argument and shows which version each investor relied on.
Update protocol agreed. Decide in advance what triggers a supplement: a lost major customer, a missed milestone, a new lawsuit or a term change. Any material change after the PPM goes out requires a supplement sent to all recipients before further sales close.

Action step: put the Form D deadline, the state filings and a 30-day PPM review date into the deal calendar before the first data room invitation is sent.

Using This PPM Checklist With a Template

A working PPM checklist example looks like a spreadsheet. It has one row per item, columns for owner, evidence file, reviewer initials and date, and a status flag that stays red until counsel signs off. Teams that rebuild this for every raise tend to miss the same items each time, usually the bad actor questionnaires for compensated solicitors and the Form D clock. Those two items are the ones that appear in SEC enforcement releases.

A ready-made PPM template and checklist gives you the structure on day one. You get pre-drafted risk factor categories, a claim-to-source tracker, a pro forma cap table linked to the financial model, and a filing calendar. Your counsel then reviews the document instead of drafting it from scratch, which reduces legal fees and shortens the time from term sheet to first close. ModelStack's IB & M&A and VC & startup collections include PPM, subscription and data room templates built around the 22 items above. Download one, assign an owner to each row, and don't send the memorandum until every row is green.