Partnerships, Private Placements, Venture Capital（一）.pptVIP

XV. Partnerships, Private Placements, Venture Capital A. PARTNERSHIPS Types of Partnerships General Partnership an agreement between individuals to share in running a business, sharing gains and losses Personal Liability – each partner has unlimited liability for partnership debts, could lose more than his or her investment Unless specified otherwise, all gains and losses are shared equally among the partners The partnership agreement provides the legal framework for operations, including division of profits and losses Investment Club – a partnership formed to invest pooled funds – generally divides profit and loss by initial investment A. PARTNERSHIPS Limited Partnerships – a form of ownership in which investment control is assumed by a general partner, while the other partners have limited control General Partner – organizes the partnership, writes the partnership agreement, assumes any partnership liabilities in excess of the limited partners’ investment, and obtains a majority of partnership profits in return Limited Partner – passive investors, provide money only, can lose no more than the money invested, receive a share of the partnership’s profits A. PARTNERSHIPS Partnership Agreement – the legal document specifying partners’ rights and division of gains and losses Prospectus – for limited partnership investments, includes the partnership agreement and details fees and the division of profits between limited and general partners Limitations on Partnership Investment – for a general partnership, there are no restrictions, however, limited partnerships generally require limited partners to be accredited investor B. PRIVATE PLACEMENTS Can be used for either private (not publicly traded) stock offerings or other ownership shares of a business For a formal private placement, the investor must be an accredited investor Private placement memorandum – similar to a prospectus, details the risks of an offering, business officers, actual and pro forma financial