PPs are securities issued by a company in accordance with an exemptions from the SEC’s registration requirements. PPs allow companies to raise capital from a limited number of accredited investors to start or grow their business. There are many more companies that raise capital via PPs than accessing public markets. Although Private Placements are exempt from registration with SEC, issuers of PP securities are still subject to all of the anti-fraud provisions of the Securities Regulations.
For more information see the link below.
https://www.finra.org/investors/private-placements-explained
