Frequently asked questions
Straight answers about securities offerings, private placements and working with Centarus.
Working with Centarus
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What does Centarus Legal Services do?
Centarus is a securities law firm that helps businesses navigate the legal requirements of raising capital. Raising capital through a securities offering generally means selling an ownership interest, a debt instrument, or another investment security to investors in exchange for funding. Federal and state securities rules affect how an offering is structured, what investors must be told, and how the securities may be offered and sold. Our services include preparing private placement memoranda (PPMs), structuring securities offerings, handling regulatory filings, and advising on Regulation D, Regulation A+, and other capital-raising transactions. For example, a company financing expansion may need to decide whether to offer equity, issue debt, or use a combination of both. Our attorneys understand both securities law and the business realities of raising capital.
Why should I hire Centarus instead of a general business law firm?
Raising capital involves specialized federal and state securities laws. Unlike an ordinary commercial contract, an investment offering may trigger securities registration requirements or require a valid exemption from registration. The choice of exemption can affect which investors may participate, how the company can market the offering, and what disclosures and filings are necessary. Inadequate disclosures or improper solicitation can create regulatory exposure and investor disputes even when the underlying business is sound. Centarus focuses on securities transactions and combines legal drafting experience with practical knowledge of how offerings are structured and presented to investors. Our objective is not simply to prepare documents, but to help clients make informed decisions about their capital-raising plans.
Does Centarus help companies raise capital, or does it only prepare legal documents?
Centarus offers more than legal document preparation. A securities offering begins with business decisions: how much capital to seek, what investors receive, and how the company expects to use and repay or distribute that capital. A PPM and related subscription documents describe the offering, but those documents should reflect a structure that makes economic sense for the company and its prospective investors. For instance, the terms of a real estate investment may need to address preferred returns, distribution priorities, and the sponsor’s compensation. Our attorneys help clients consider offering structures and practical capital-raising issues. Through separately operated affiliated businesses, clients may also have access to business consulting and broker-dealer services, subject to separate engagement terms and applicable regulatory requirements. Legal representation by Centarus does not itself mean that investors will be located or that financing is guaranteed.
What types of companies does Centarus work with?
Centarus serves businesses seeking capital for a variety of purposes, including growth, acquisitions, real estate projects, investment funds, and new ventures. A real estate sponsor may raise money to acquire or develop property, while an operating company may seek investment to add locations, buy equipment, or finance expansion. Investment funds may pool capital from multiple investors under a defined investment strategy. Each use case raises different questions about investor rights, liquidity, risk disclosures, and how proceeds will be deployed. Our experience spans industries such as real estate, technology, manufacturing, and financial services. The appropriate offering structure depends on the company’s business model, financing objectives, and prospective investors.
How much does Centarus charge to prepare a private placement memorandum?
A private placement memorandum (PPM) is a disclosure document used in many private securities offerings to explain the investment opportunity and its material risks to prospective investors. It typically describes the issuer and its business, the securities being offered, how proceeds will be used, investor eligibility, conflicts of interest, and key terms and risk factors. A PPM is not a promise of returns or a substitute for a sound business plan; its purpose is to help prospective investors evaluate the offering with relevant information. The PPM is often accompanied by a subscription agreement through which an investor applies to purchase securities and makes required representations. Centarus generally uses flat-fee pricing for PPM preparation, giving clients greater visibility into their legal costs before an engagement begins. The actual fee depends on the complexity of the offering, the documents required, and the scope of services. We discuss those requirements and provide a proposal before beginning work; additional documents or services outside the agreed scope may be priced separately.
How long does Centarus take to prepare a PPM?
A typical Centarus PPM engagement takes approximately three weeks. Preparation involves more than filling in a template: counsel must understand the business, the intended investors, the proposed securities, and the economic terms. Information gathered during intake informs the disclosure of risks, use of proceeds, management arrangements, and investor rights. A well-organized client who can provide complete, consistent information helps the drafting and review process move efficiently. That timeframe allows our attorneys to learn about the business, evaluate the proposed offering structure, and prepare the necessary documentation. More complex transactions may require additional time. We believe careful preparation at the beginning helps avoid costly problems later.
Will Centarus help me decide how to structure my offering?
Yes. Securities law compliance is essential, but an offering must also make business sense. Equity investors generally receive an ownership interest and may participate in future profits or appreciation, while debt investors typically have contractual repayment rights under stated terms. Some offerings use preferred returns or a distribution waterfall, which sets the order in which available cash is paid to different participants. Management compensation, voting rights, dilution, and exit provisions can also materially affect the economics of an investment. Depending on the engagement, our attorneys can discuss debt versus equity, preferred returns, investor distributions, management compensation, and other structural considerations. We work to help clients understand the legal and practical implications of their choices.
Can Centarus help me choose between Regulation D and Regulation A+?
Yes. Regulation D and Regulation A are different exemptions from the Securities Act’s registration requirements, and each can provide a route for eligible companies to offer securities without a traditional registered public offering. Regulation D is commonly used for private placements; the applicable rule determines investor qualifications, solicitation restrictions, and other conditions. For example, Rule 506(b) generally prohibits general solicitation, while Rule 506(c) permits it if all purchasers are accredited investors and the issuer takes reasonable steps to verify that status. Regulation A, often called Regulation A+, permits qualifying issuers to conduct offerings under an SEC qualification process; Tier 2 can allow participation by non-accredited investors, subject to applicable investment limits and other requirements. Regulation A offerings generally involve more extensive offering disclosures and, depending on the tier, ongoing reporting obligations and greater upfront expense than many Regulation D offerings. Centarus advises clients on both Regulation D private placements and Regulation A+ offerings, including Tier 2, and helps evaluate which approach may be appropriate for their capital goals, investor audience, timing, and budget.
What happens after Centarus completes my PPM?
Once the offering documents are completed, the company can move toward offering securities in accordance with the applicable legal requirements. A PPM is a disclosure tool, not a marketing campaign or a guarantee that investors will commit capital. Before accepting subscriptions, the issuer should follow the procedures and investor-qualification requirements of the chosen exemption, and investors ordinarily complete subscription documents for the issuer’s review and acceptance. Depending on the exemption and where investors reside, the offering may also require federal notices such as Form D and state securities notice filings. The company must also follow applicable restrictions on advertising, communications, and use of offering proceeds. Depending on the engagement, Centarus may assist with required filings, offering-related legal questions, and additional documentation. Clients seeking capital-raising assistance can separately explore services available through affiliated businesses.
How do I get started with Centarus?
The first step is a consultation about your business, the amount of capital you hope to raise, your intended investors, and your anticipated timing. It helps to know whether the money will finance operations, an acquisition, real estate, or another specific project. Prospective issuers should also consider whether they expect to approach existing relationships, accredited investors, or a broader investor audience, because that choice may affect the available offering exemptions. A preliminary discussion of ownership, debt obligations, financial projections, and proposed investor terms can reveal issues that should be resolved before drafting begins. We can then discuss potential offering approaches, the legal services involved, and the next steps. You can request a consultation through the Centarus website.
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