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How Do I Become a Private Placement Agent?

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  • Written By: Geri Terzo
  • Edited By: PJP Schroeder
  • Last Modified Date: 05 November 2016
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Following a career as a private placement agent, which is a financial representative that connects companies that need money to grow with investors, requires a financial background. Private placement agents are often hired by large investment banks, smaller boutique financial advisory firms, and private equity shops, for example. A career as a private placement agent is closely tied to alternative money management because alternative investment firms often turn to the private markets. An individual must demonstrate strong personality skills, an aptitude for the financial markets, and an ability to bring different parties together in order to become a private placement agent.

Financial services is a competitive arena where the most highly educated and those with the best industry connections often excel. Without a bachelor's degree in finance, economics, or a related major, an individual is at an extreme disadvantage. A postgraduate degree is not always expected, but it may lead to higher compensation for the professional who wants to become a private placement agent.

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Companies that turn to private placements prefer to keep a low profile in the capital-raising effort. Otherwise, these firms might have used the public markets. Regardless, the type of financing that can be obtained in a private placement might be equity- or debt-related. In order to become a private placement agent, an individual needs to be able to recognize where the best opportunity is at a given point in time in accordance with the condition of the economy and capital markets overall.

Also, private placement agent duties are extremely relationship driven. Often, companies that use the private markets receive financing from the same investors time and time again. Subsequently, to be successful, professionals in this field must be able to develop, nurture, and maintain client relationships in addition to using marketing techniques on behalf of clients.

Although private placement agents may be hired by large banks and other financial services firms, seed capital firms may be another option. These institutions are essentially responsible for providing capital to start-up businesses or to companies that are in need of additional financing for expansion or product development. Professionals in the seed capital business serve a similar function to private placement agents.

Seed capital firms provide financing to start-up businesses or projects, while private placement agents typically match investors with firms in need of capital. Both are in the money-raising business, and to become a private placement agent or work for a seed capital firm, an individual must have an ability to recognize investment opportunities early and possibly before a client is even profitable.

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