Problem

Creating a PPM is required to raise funds beyond the family and friends round(s). Many PPMs minimally convey the company’s prospects and indicate the management team has not put the required effort into creating a comprehensive business plan. Directly copying Business Plan components into the PPM conveys a lack of management focus. These two are different documents for different purposes. Investors will want to see the Business Plan in addition to the PPM.

Solution

The best way to construct a PPM is to have a thorough and comprehensive Business Plan in place. Investors want to see both docs. When written separately, investors will receive the same message from a more concise perspective in the PPM, which serves to underline or emphasize the critical components of the company’s uniqueness. Since the orientation of these two docs differs, a high quality PPM conveys the Business Plan doc in a manner that meets the legal requirements while providing a more concise and targeted discussion of the new venture and why funds are being raised.

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