Stone Business Law is a transactional practice, focusing on entrepreneurial companies.

Friday, August 31, 2012

The SEC published a proposed regulation yesterday with potentially far reaching importance to anyone involved in raising equity investments in the U.S.

I’m assuming most readers aren’t securities law experts, so I’ll start with a bit of background.  Generally speaking, federal securities laws prohibit companies from offering or selling securities (such as corporate stock) unless the company first “registers” the securities with the Securities and Exchange Commission (SEC).  Registration is what people commonly refer to as “going public.”  In other words, it’s not really an option in raising money for startups and other private companies.  That means that private company financing usually requires an exemption from the registration requirement.

The main exemption used by startups issuing stock is a statutory exemption for... Read More ››