California Grapes International, Inc (CAGR)

[ACTC]

I'm fairly new to investing and would like to know; How do these private placements work? Specifically, lets say a private investor who has a lot of money and believes that a certain company will do well in the future wants to invest in that company. He/she can buy common stock on the market or make an agreement to buy certain number of shares for a certain price from the company directly. Is that what is called a private placement?

If so, is part of the deal that they get a cheaper price instead of market value since they are investing a big amount of money?

Are there any limitations when they get stock this way? for example maybe they can't sell the stock right away?

If dragon 5 or someone else can explain this, i (and i'm sure many others) will appreciate this.

Thanks