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How to Write a Business Plan for Raising Venture Capital

Growthink Blog

Explain how you will retain your customers, whether through customer relationship management (CRM) applications, building network externalities, introducing ongoing value-added services, or other means. Contact our private placement memorandum experts. Detail your customer retention plan. Define your partnerships. read more.

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Raising Capital? 3 Tips for Entrepreneurs

Scott Edward Walker

The most common exemption for startups is the so-called “private placement” exemption under Section 4(2) of the Securities Act of 1933 and/or Regulation D , the safe harbor promulgated thereunder. The rule of thumb in connection with private placements is only to offer and sell securities to “accredited investors” under SEC Rule 506.

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How to Get Funding for a Business

Up and Running

Venture capital professionals look for businesses that they believe could produce a huge increase in business value within just a few years. Don’t take private placement, angels, friends, and family as good sources of investment capital just because they are described here or taken seriously in some other source of information.

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Can a private company take investment money from anyone?

Gust

Unfortunately, a private company in the US may not take investment money from “anyone” The only people who are legally eligible to purchase an equity interest in a private company without a great deal of special paperwork are, as you noted, Accredited Investors.

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Does your company have a “dirty cap table?”

Berkonomics

Currently that standard requires a minimum of $200,000 in annual income or over one million in net assets, including the value of the investor’s principal residence. What if some past investors don’t meet that standard? It is worth checking with an attorney to see if such investors are truly exempt. Does issuing a PPM insulate the company?

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SEC Expands “Accredited Investor” Definition

Scott Edward Walker

The most common exemption used by startups is the so-called “private placement” exemption under Section 4(2) of the Securities Act of 1933, as amended.

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Angel Funding Harder to Raise.But Not Really

Growthink Blog

The Act modified the asset calculation to exclude the value of the individual's home. Regulation D still allows up to 35 non-accredited investors to participate in a private placement. As a result, many angel investors who were previously categorized as accredited are no longer accredited.