Raise Funds for Your Business
Selling ownership in your company may be a good way to fund growth. However, many naïve business owners avoid this option because they think it is too expensive. However, with the help of the experienced attorneys at Epiphany Law, a private offering can be an affordable way to raise additional capital.
Private offerings can be extremely beneficial to your business. However, such offerings are considered securities and are subject to complex state and federal laws and regulations. Additionally, officers and directors can be personally liable for failure to comply with anti-fraud rules. Thus, it is critical to use a knowledgeable business law firm.
How Epiphany Law Can Help
Epiphany Law has successfully completed many private offerings, and has the experience to deal with the complexity of private offering laws. Epiphany will help you evaluate which exception may apply to your situation and help ensure you follow the correct steps to avoid costly registration and liability.
The experienced attorneys at Epiphany Law will guide you through the process of creating the legal paperwork required to take on outside investors. We will also help you think through the implications of bringing in new investors, including voting rights, reporting requirements and maintaining control of the company.
Questions & Answers
Q: Who regulates private offerings?
A: Federal securities laws are administered by the United States Securities and Exchange Commission (SEC). In addition, states have their own securities laws. The key to a private offering is to successfully utilize an exception to the general rule that any company selling an ownership unit must register with the SEC. Registration with the SEC is costly, complicated and means that your company will be subject to a number of ongoing reporting requirements.
Q: What is a PPM?
A: A PPM is an acronym for a Private Placement Memorandum. The PPM includes key information, including important notices to the potential investor, qualifications and limitations on an investor’s use of the information disclosed in the PPM, a summary of the terms of the offering, the intended use of the proceeds of the offering, risk factors, current capitalization of the company, business plan, management and key employees. This document is critical to avoiding liability under antifraud rules.
Q: How many outside investors can I get?
A: That depends on many factors, including how much money you are attempting to raise, where the investors live and whether the investors are accredited. In general, the law is much more lenient when investors are accredited, meaning someone who has sufficient net worth to understand private investments and bear the risk of such investments.