Private Offering Law and Legal Definition

Private offering refers to the issue of securities directly by the issuer to one or a few large investors or to a small group of interested buyers. A private offering is exempt from the requirements of filing a registration statement with the Securities and Exchange Commission as it does not qualify as a public sale of securities. This is generally considered a cost-effective way for small businesses to raise capital without "going public" through an initial public offering (IPO). This is also referred to as private placement.