A recent article in “Entrepreneur Magazine” featured Corey Ribotsky, the founder and managing member of the N.I.R. Group, headquartered in Roslyn, NY, discussed the increased popularity of private investments in public entities, otherwise known as PIPEs. Despite the generally sluggish economy PIPE investing is seen to be rising. Ribotsky urges due diligence as essential when contemplating deals of this genre.
The article focuses on PIPEs becoming more mainstream as investment options while traditional financing becomes more difficult to obtain as the market for secondary offerings slows.
The article, entitled “Terms of Endearment” cautions that the terms of these deals must be meticulously scrutinized. Ribotsky commented:
“The company has to know who they’re getting into bed with. You want someone who’s going to be a financial partner as opposed to someone who’s just looking for a trading play.”
