Tag Archives | placement

Private Placement

See Also:
Convertible Debt Instrument
Common Stock Definition
Preferred Stocks
Hedging Risk
Treasury Stock

Private Placement Definition

The private placement definition is the process of raising capital directly from institutional investors. A company that does not have access to or does not wish to make use of public capital markets can issue stocks, bonds, or other financial instruments directly to institutional investors. Institutional investors include the following:

You do not have to register private placement issuances with the Securities and Exchange Commission (SEC). In addition, you do not have to provide a detailed prospectus. The issuing company and the purchasing investors negotiates the terms and conditions are negotiated. You cannot trade private placement securities on public markets, but they can be traded privately among institutional investors after they have been issued by the issuing company.

A private placement is in contrast to a public offering, which is issued in public capital markets, requires a detailed prospectus, must be registered with the SEC, and can be traded by the investing public in the secondary markets.

Advantages and Disadvantages of Private Placement

The primary advantage of the private placement is that it bypasses the stringent regulatory requirements of a public offering. You have to conduct public offerings in accordance with SEC regulations; however, investors and the issuing company privately negotiate the private placements. Furthermore, they do not have to register with the SEC, do not require the issuing company to publicly disclose its financial statements, and ultimately avoid the scrutiny of the SEC.

Another advantage of private placement is the reduced time of issuance and the reduced costs of issuance. Issuing securities publicly can be time-consuming and may require certain expenses. It forgoes the time and costs that come with a public offering.

Also, because the investors and the issuing company privately negotiate private placements, they can be tailored to meet the financing needs of the company and the investing needs of the investor. This gives both parties a degree of flexibility.

Now, let’s look at the disadvantages of private placement. The main disadvantage of private placement is the issuer will often have to pay higher interest rates on the debt issuance or offer the equity shares at a discount to the market value. This makes the deal attractive to the institutional investor purchasing the securities.

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Private Placement, Disadvantages of Private Placement, Private Placement Definition
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Private Placement, Disadvantages of Private Placement, Private Placement Definition

 

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How to Hire a CFO Controller

How to Hire a CFO Controller

When you need to hire a CFO Controller, there are a few steps that you need to take prior to the actually hiring. Start the ad placement process by first asking yourself a few questions about your company. How does the company describe itself, its culture and industry space? What intangibles are you looking for? What sort of hard skills and experiences the position will require? You must be prepared to set expectations regarding the typical tenure and career track of that position as the company grows. Come up with a list of points to cover. Other issues to consider include the salary for the position, start date, travel expense for interviews, and relocation package. Ad Placement Options: Houston Chronicle, Monster.com

Accentuate the positives when writing the placement ad.

It is also important to manage your expectations in terms of the candidate pool. For instance, in a good economy it may not be so easy to get good candidates. Certain compromises on geographical search area, salary, and moving expenses may need to be considered. You may also need to clarify your stance on candidates with short work tenures (i.e. job hopping).

Filtering Resumes

Things to look for include: industry experience, education or Certification- CPA, MBA and specific experience sets (Ex: Systems Implementation, Financial Transformation)

Initial Screening/Phone Interview

After you have screened for your top candidates, you are now ready to begin contacting them and set up an initial phone interview. For out of town candidates, you may want to advise them of the company’s stance on interview travel expenses and/or relocation package.

Ask the following questions to candidates:

1. What are you looking for in a position?

2. Tell candidate about the position and the company

3. Would this be acceptable to you? Is this something that interests you?

4. What are your salary requirements?

5. When can you start?

6. Can you provide any references?

Summarize and review each candidate

Make sure to cover areas such as education, industry and work experience, salary expectations, etc. And then, identify the top 2 candidates from your round of phone interviews. Out of the total pool, prepare a list of 4-5 candidates for an office interview.

Office Interview

Start off by deciding who should be involved in the interview. Confirm open time windows in their schedules. Decide on the type of format that you would prefer: group or one-to-one? Start thinking about what you would like to see out of the interview.

On the candidate side, obtain the interviewee’s permission to contact their references. If they have not yet provided any, this would be a good time to ask for them.

Hiring Process

Once you determined whom you are hiring, you are now ready to begin the hiring process. Decide who should do the reference and background checks. When all reference and background checks have been completed, contact the candidate to inform them of their hiring status. Then go over the salary and benefits. Follow-up your conversation with an offer letter. Make sure that compensation is on a period basis versus an annual basis. Giving an annual pay may infer a contract which may open the company up for possible litigation in case of termination.

Background Check

There are a variety of companies that are able to conduct background checks on employment, criminal history, education, references and professional license status:

Here are some for your reference:

1. Kress Employment Screening

2. Choicepoint

3. ADP Screening and Selection Services

4. Personnel Profiles

5. Inquest

In order to determine which candidates are the right fit for your company, download and access your free white paper, 5 Guiding Principles For Recruiting a Star-Quality Team.

hire a cfo controller

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hire a cfo controller

See related article: How to Hire New Employees

See Also:
How to Choose An Independent CPA or Auditor
How to Control Audit Fees
American Institute of Certified Public Accountants – AICPA
How to Control Annual Audit Fees
How to create dynamic cash flow projections

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