Series 79: Placement Agent Agreement And Compensation

Placement Agent Agreement and Compensation

In a private placement, the ball begins rolling with the negotiation and execution of the placement agent agreement. This document sets out the terms of the agreement between the issuer and the “placement agent,” the investment banker, the broker-dealer, or another party charged with attempting to place the securities with investors. The placement agent agreement is somewhat analogous to the Underwriter Agreement in a public offering.

The placement agent agreement almost always specifies that the agent is retained on a “best efforts” basis; while firm commitments are not unheard-of in private placements, they are used only in un