Frequently Asked Questions

Private Placements

  • open/close What is a private placement?
    A private placement is an equity offering that allows accredited investors to buy a stake in a rapidly growing and innovative company before it sells its shares to the public in a registered initial public offering (IPO), merges, or is bought out. Private placements present an attractive investment opportunity as they can result in much higher returns than a traditional stock purchase or an IPO.
  • open/close How does the private placement offering process work?
    A company wishing to make a private placement will issue a Private Placement Memorandum. The Private Placement Memorandum will have information about the company's financial background and business plans as well as other company related information. In addition, every potential investor may conduct his or her own independent research into any company making a private placement. If the investor decides to invest in the company, they will complete the appropriate Subscription Agreement.
  • open/close Can anyone buy private placements?

    No, only accredited investors can buy private placements. To determine your eligibility you must register with Algodon Group. For an individual to be an accredited investor that person must meet certain SEC requirements.

  • open/close What is the difference between an initial public offering (IPO) and a private placement offering?
    An IPO differs from a private placement because an IPO is a company's introductory sale of shares to the general public whereas a private placement is a company's private offering of shares to institutional and accredited investors. Thus, private placements are exempt from the stringent registration requirements, and allow the issuing company to save on costly underwriting fees associated with IPOs. Because they are not publicly traded on an exchange, private placements are also less liquid and have limited public information, but have the potential for a much higher return.
  • open/close Why hasn’t this type of investment opportunity been available in the past?

    Until now, the private placement and initial public offering (IPO) markets have predominantly been offered to large institutions and their preferred customers. It is impossible in today's economy to keep excluding the individual investor--there is both far too great a demand for private equity offerings and far too much information available to limit this type of investment opportunity to institutions. Algodon Partners is helping to create a new marketplace to bridge this need.

  • open/close Why do companies offer private placements?
    Private placements allow companies to avoid the costs and delays of making an offering to the general public. Companies issue private placement shares in order to generate capital to run their business. The size of the transaction typically is substantially smaller than an IPO. In addition, some companies looking to raise capital in order to grow their business may not be able to meet the more stringent requirements of a public offering.
  • open/close Are private placements risky?
    Private placements involve many risks, some of which are:
    • Illiquidity of securities
    • There may be no public market for securities
    • Limited public information
    • Limited operating history of the company
    • Dependence on key existing and future personnel
    • Possibilities of immediate and substantial dilution
    • Broad discretion in application and use of funds
    • Additional financing often will be required, but no guarantee that it will be available
  • open/close How does DPEC Partners mitigate these risks?
    We make it our business to try to limit many of these risks by bypassing the more speculative "seed companies" and choosing only proven emerging growth companies with experienced management teams and discernible exit strategies. In addition, we will provide through our website a great deal of financial information about each company and keep our members apprised of any new developments concerning their private placement investments.
  • open/close What kind of exit strategies do you foresee for the issuing companies?

    We understand the importance of liquidity when making an investment decision. Therefore, Algodon Partners carefully reviews each company to make sure that they have a discernible exit strategy and each transaction is structured with the anticipation of an exit event within three years of the transaction closing, either through an initial public offering, merger, or acquisition.

  • open/close How does Algodon Partners differ from a venture capital firm?

    A venture capital (VC) firm raises money from external sources and then re-invests these funds in various investment opportunities. At Algodon Partners, each member can make his/her own independent investment decision by choosing from our selection of quality private placement opportunities. In addition, VC firms often focus on one industry or market segment where as Algodon Partners shall be open to qualified candidates in many industries and market segments.

  • open/close Who is DPEC Capital’s auditor?
    DPEC Capital’s auditors are Lilling & Company, LLP. We also engage several other auditors for our investment partnerships, depending on the scope and area of business.
  • open/close What is a Schedule K-1?
    An IRS Schedule K-1 is used to report a beneficiary's share of income, deductions, credits, and other items from certain trusts or partnerships.
  • Investors

  • open/close Why would investors be interested in Algodon Partners?

    Our ability to provide private placement opportunities to our investors, along with traditional internet brokerage services, enables Algodon Partners to stand out from the competition, both on and off the Internet. We pledge to adhere to our goals: to provide unique quality investment opportunities, to offer outstanding personal service, and to offer value added, up-to-the-moment information to our investors.

  • open/close Who is eligible to invest with Algodon Partners?
    Our members must meet all of the following SEC requirements: Must be 21 years or older, a U.S. resident and an "accredited investor." An accredited investor is generally defined as an individual who had an income in excess of $200,000 in each of the two most recent years, or joint income with a spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year, or whose individual net worth, or joint net worth exceeds $1,000,000. For a more complete description, please see SEC requirements.
  • open/close How do I invest with Algodon Partners?

    To begin the application process, simply click here and fill out a few simple fields. We will contact you directly to determine your accreditation status. Once approved, you may begin participating in upcoming private placement offerings and Algodon partnerships.

  • open/close What is involved in the application approval process?

    The information that you provide us with on our application will enable Algodon Partners to quickly confirm your accreditation status. Once approved, we will contact you via email (fax or phone if email is unavailable) and explain how you may begin participating in upcoming private placement offerings.

  • open/close When an offering is presented, what type of company information is available for members to review?

    In order for our members to make the most informed investment decisions, Algodon Partners will provide a wealth of online information about each new offering. The Private Placement Memorandum has information about the company's financial background and business plans. Other important information includes an assessment of the management team, financial statements, investment considerations, valuation, capitalization, and risk factors of the offering.

  • open/close What information is available after an offering is completed?

    Algodon Partners requires that all of its companies provide their investors with specific detailed information once they have completed an offering. These disclosures include press releases, quarterly and annual reports, a virtual interactive forum and online quarterly meetings. Members are also encouraged to contact a Algodon Partners specialist via email or phone with any questions that may arise.

  • open/close How does Algodon Partners protect its members' personal information?
    We use leading privacy protection technology, including encryption and several password protection safeguards, to keep your name and information secure. We will never sell, loan or rent your name and email address to anyone. We are committed to taking every possible precaution to ensure your privacy.
  • open/close What should I do if my login fails?
    Remember that your password is case sensitive, and make sure that your caps lock is off. Your log-in should work every time. If for some reason, it does not, please contact us immediately at 212-739-7650 (toll free 866-960-7700), or email us at info@algodongroup.com.
  • open/close Are there different types of accounts available to Algodon Partners members?

    Yes, there is a range of account types depending upon your specific investment goals. Please call our Private Client Group at 866-960-7700 if you have questions after viewing our website.

    Online applications are available for:

    • Individual or Joint accounts
    • Trusts
    • Corporations
    • Partnerships
    • IRAs
    • Custodial Accounts (UGMA)
    • Pensions
    • Profit Sharing Plans
    • 401Ks
  • open/close When is a K-1 distributed?
    We are aiming to distribute most of the Schedule K-1s to our investors by early April; however, depending on the investment and particularly with our foreign holdings, our clients may have to file an extension in case we don’t distribute the Schedule K-1 until later in the year.
  • Registered Investment Advisors

  • open/close Who is eligible to join as a Registered Investment Advisor?
    Algodon Partners encourages all money managers and financial advisors who manage portfolios of high net worth individuals to join as members.
  • open/close Why join Algodon Partners as a Registered Investment Advisor?
    We offer investment advisors the opportunity to enhance their clients' portfolios with pre-screened private placements. Our low investment minimum of $25,000 also enables you to include more clients in our attractive deals as well as add diversification to your clients' portfolios.
  • open/close How much does it cost join as a Registered Investment Advisor?
    Investment advisors need only pay a one-time business membership fee of $1,500, to be waived for the first 200 to join. We will also charge an annual subscription fee of $250 after the first year of membership. However, this annual fee will also be waived if you invest in one or more private placements during the preceding year.
  • open/close How can Registered Investment Advisors purchase private placements for multiple clients?
    Algodon Partners can assist you in setting up your own private equity portfolio for multiple clients through our Limited Liability Corporation (LLC) program. By creating your own Investment LLC or "fund" you will be able to purchase quality private equity offerings for several clients under one legal entity with full discretion over the minimum investment amounts. This type of arrangement also entitles you to a standard management fee and, in some cases, a performance allocation ("carried interest"). To learn more about this special program please call 866-960-7700.
  • open/close What are the benefits of partnering with Algodon Partners?
    There are several benefits to becoming a Algodon Partners Independent Broker. By teaming with us you will gain more freedom and higher payouts, while also benefiting yourself and your clients through access to our quality name brand recognition, variety of financial products, broad range of support services, and of course our quality private placement offerings. We make the switch easy for you!
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