A private offering, also known as a private placement, is a securities offering made to a limited group of private investors. The offering is not required to be registered with the Securities and Exchange Commission (SEC). The word registration is synonymous with the term public offering, or, what is more commonly referred to as “going public.” To avoid the default rule of having to register a securities offering, an exemption from the rule must be met. One of the most common exemptions is Rule 506(b) of Reg. D, which allows companies offering securities to certain investors to avoid registration if the offering is only made to accredited investors and up to 35 non-accredited investors that are sophisticated, which is also a defined term. Other requirements also must be met, such as a Form D being filed with the SEC within 15 days after the first sale, and the offering may not generally be advertised or generally solicited. Potential investors in private offerings are, as a result, typically wealthy individuals that have the ability to take on substantial risk and have a preexisting relationship in some manner with the offerer. The documentation in a private placement typically includes a private placement memorandum (PPM), an accredited investor questionnaire, and a subscription agreement. Other common documentation may include a business plan and executive summary of the offering, each of which may be provided to interested investors prior to the circulation of the investment documents.