Private Placement

A private placement is a sale of securities or tokens directly to a limited number of qualified investors — such as accredited investors (see Kaavon's "Accredited Investor" glossary definition) or institutional investors (see Kaavon's "Institutional Investor" glossary definition) — rather than through a public offering registered with securities regulators and open to the general public. Private placements typically rely on a specific regulatory exemption, such as Regulation D (see Kaavon's "Regulation D" glossary definition) in the United States, to legally avoid the extensive disclosure and registration requirements a public offering would otherwise require.

Securities or tokens sold in a private placement are typically subject to resale restrictions for a specified holding period, and private placement investors generally receive less standardized public disclosure than they would from a registered public offering, placing more responsibility on the investor's own due diligence. Many early-stage crypto project token sales to venture investors have been structured as private placements specifically to raise capital while navigating securities-law requirements before any public token sale.