Section 4(a)(2) of the Securities Act (formerly Section 4(2) but redesignated Section 4(a)(2) by the JOBS Act) provides an exemption from the provisions of Section 5 of the Securities Act for "transactions by an issuer not involving any public offering." Companies rely on this private placement exemption for a wide variety of transactions, including, but not limited to initial sales of equity directly to investors or through financial intermediaries; venture capital rounds; limited sales of stock to employees under certain benefit plans; and high-yield bond and investment grade debt offerings to multiple institutions.

For a detailed description of the requirements of the Section 4(a)(2) exemption, see Practice Note, Section 4(a)(2) and Regulation D Private Placements.

For a discussion of unregistered offerings of securities generally, see Practice Notes, Unregistered Offerings: Overview and Conducting an Unregistered Offering: Overview.