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How to acquire stake in company without buying in open market?
As retail investor, how to acquire a stake(eg 1%) in a company apart from buying from open market? how to make the company trust about my investment on them?
Particularly in indian stock market
1 Answer
- LenLv 71 decade agoFavorite Answer
There's confusion in your question: Buying in the open market IS RETAIL.
It is possible to grab a stake in a company's stock by participating in a PPM or private placement. The "M" represents "memorandum." I've participated in a number of these. Usually the participant gets to put out a sum of money and must fill out a questionnaire stating he/she is a "qualified investor," meaning that person has an estate exceeding a certain amount of money. The document filled out is an SEC requirement and exists to make associated risks clear to the subscriber.
I got into two PPM's through business associates. There are many such opportunities out there. You could contact websites belonging to companies in which you have an interest and might be worthy of your investment consideration. Study their offerings, see if they have any current offerings being handled by brokerages and then contact those broker/dealers accordingly. If none are listed, call the company itself and ask if there is a current offering being sold via broker/dealers.
This is risky business, make no mistake about it. You can lose all of your money. I've not seen an offering (of a placement) running under $25,000 although in one instance, I pulled friends together and we did a four-way split. This lowered the risk for each of us. It has worked out profitably thus far.
Len