This article is broken into two segments. This month's segment will introduce you to the basics of raising money for a venture. Next month, part two of the article will go into some of the specifics of that process, including the basics of a private placement memorandum. For any business attorney, knowledge of these issues is a must, and the author deals with them very well in these two articles.
From Advising the Small Business
- Find out which laws you need to be aware of.
- Learn what an accredited investor is.
- Find out what restricted stock is.
Which Laws Should a Small Business Be Aware of When Raising Money?
Even when a client already has a group of friends and family lined up for a seed round of financing, they need to be aware of their securities law obligations because there are a number of legal issues and requirements to be concerned about. The applicable requirements will be determined in part by the number of investors, which state (or states) they are in, and whether they are all “accredited investors.