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. If the finder is not registered as required and sells securities on behalf of a company, the private placement will be invalid (i.e.,

Gaja Capital invests Rs 204 crore in Navi Technologies

Our Own Start-up

The latest private placement follows a fundraising of over Rs 3,000 crore by the company, led by Bansal and other investors earlier this month. Navi Technologies has made allotments of 1.45 crore equity shares, at a price of ?140.5 per share.

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Perk.com Raises $20 million and Begins Trading on the Toronto Stock Exchange

SiliconHills

million in a private placement financing as part of a qualifying transaction. Perk.com, based in Austin, announced Wednesday that its common shares began trading today on the Toronto Stock Exchange under the stock symbol “PER.” ” The startup, which creates a rewards platform for users online, also raised about $20.2 Canaccord Genuity Corp.

Fresh from the SEC: Magic Raises approximately $25 million in Recent Filings

VC Cafe

million in a private placement transaction in December and an additional $3,7 million in option sales according to a recent SEC D filing. million in a private placement transaction in December and an additional $3,7 million in option sales according to a recent SEC D filing.

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Angel Funding Harder to Raise.But Not Really

Growthink Blog

Regulation D still allows up to 35 non-accredited investors to participate in a private placement. If you are seeking to raise funding from angel investors and/or through a private placement, read this article which details the Regulation D exemptions you need to be aware of. Last month, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted into law. One type of consumer that the Act tries to protect is angel investors.

SEC Expands “Accredited Investor” Definition

Scott Edward Walker

As the SEC press release provides: “For the first time, individuals will be permitted to participate in our private capital markets not only based on their income or net worth, but also based on established, clear measures of financial sophistication.”

20 Reasons Why You Need a Business Plan

Growthink Blog

Or, if you're creating your own PPM, you can save time and money with Growthink's new private placement memorandum template. Below are our top 20 reasons why you need a business plan. Reference our proven business plan template to most quickly and easily complete your plan.

Could you have created a “dirty cap table?”

Berkonomics

Some small companies work to create “private placement memorandums,” attempting to protect themselves against this problem, couching the proposed investment in legal language stating the risks involved in making the investment. Oh, I know. When you started the business, you took investments from friends and family in small amounts just to get you started. Of course, that worked at the time. Enter the need for larger investments.

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.

Jumpstart Our Business Startups Act – How Will this Legislation Impact Your Startup?

Early Growth Financial Services

This legislation gives private companies the ability to advertise investment opportunities directly to the public. Historically, startups have not been able to advertise a private placement. In order to reach out to private investors, you needed to have existing connections. Jumpstart Our Business Startups, a piece of the JOBS Act, just went into effect on September 23, 2013.

Early stage money: The problem with PPMs

Berkonomics

The sale of equity in private companies is regulated by the Securities Act of 1933, which requires that the company either register with the SEC or meet one of several exemptions (Regulation D). A Private Placement Memorandum (PPM) is a special business plan defined to meet an SEC exemption. Angels, as group of accredited investors funding startup companies, are assumed to meet a Regulation D exemption for purchasing equity in private companies. By Bill Payne.

How to Write a Business Plan for Raising Venture Capital

EventMB

Contact our private placement memorandum experts. Or, if you're developing our own PPM, consider using Growthink's new private placement memorandum template. Are you looking to raise venture capital ? You need a good idea – and an excellent business plan. Business planning and raising venture capital go hand-in-hand. A business plan is required for attracting venture capital.

Why Finders Are Losers

The Startup Lawyer

Most importantly, using an unregistered broker-dealer can, at a minimum, jeopardize your startup’s private placement exemptions. Now the founders have either a really crappy financing deal (with a potentially blown private placement exemption) or have lost about 3-4 months not getting out there and networking with potential investors.

Do I need a PPM for my startup’s financing?

Austin Startup

PPM stands for “Private Placement Memorandum.” You can think of it as the private company equivalent of an S-1 , the long disclosure document that companies produce when going IPO. In healthcare, energy, and a whole host of other industries, using PPMs in private fundraising is very common. TL;DR : Legally speaking, probably not. Most tech startups never prepare one.

This Week in VC: Michael Montgomery (President, Montgomery & Co.)

Both Sides of the Table

This process is normally known as doing a “private placement&# and we agreed that in most cases you don’t want an i-bank involved in raising your first round of capital.

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Beware the “dirty cap table.”

Berkonomics

Some small companies work to create “private placement memorandums,” attempting to protect themselves against this problem, couching the proposed investment in legal language stating the risks involved in making the investment. When you seek professional investors, whether organized angels or venture capitalists, one of the early questions you are asked is “How have you financed the business so far?”

Do You Know How to Pitch Your Startup in Social Situations?

Up and Running

There’s no need to show your private placement memorandum or month to month revenue growth projects. It can be hard to pitch your startup, but with a little practice, you’ll be able to naturally bring it up in social situations—without feeling pushy or rehearsed. You’ve struck stones together and you’ve finally seen a spark. You’ve worked hard to develop your ideas and build something worthy of faith and investment.

How to Get Funding for a Business

Up and Running

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. Most healthy businesses need business financing at some point.

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Convertible Note Seed Financings: Founders Beware!

Scott Edward Walker

The rule of thumb in connection with private placements (like a convertible note seed financing) is to issue securities only to accredited investors in reliance on Rule 506 of Regulation D of the Securities Act of 1933. Second, there is no written disclosure requirement, like a private placement memorandum, if the investors are accredited. This post is the third part of a three-part primer on convertible note seed financings.

Invest in Israel Newsletter – February 2012

VC Cafe

IBM is acquiring Worklight , a privately held Israeli company that provides a mobile software platform for smartphones and tablets. Check-Cap plans to raise another $20-25 million in a private placement with the support of Citigroup Inc. As every month, VC Cafe is re-posting the “Invest in Israel” Newsletter, published by the investment promotion center of Israel’s Ministry of Industry, Trade and Labor , which offers many helpful tools for prospecting investors.

Raising Capital? 3 Tips for Entrepreneurs (Part 3)

Scott Edward Walker

Subject to certain limited exceptions, companies are prohibited from “general advertising” or “general solicitation” in connection with the private offering or sale of securities. As I discussed in part one of this series , the rule of thumb in connection with private placements is to offer and sell securities only to “accredited investors” under SEC Rule 506 of Regulation D.

Bitesize Friday – Israeli Funding Recap

VC Cafe

Below is a recap of the private placement transactions of the last three months. BrainsToVentures AG; Israel Cleantech Ventures Buyer Funds: b-to-v Private Equity S.C.S. V enture capital funding of Israel companies opened strongly in Q1 2010, with 55 deals completed since January 1oth 2o1o, according to Capital IQ.

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Invest in Israel Newsletter – February 2012

VC Cafe

IBM is acquiring Worklight , a privately held Israeli company that provides a mobile software platform for smartphones and tablets. Check-Cap plans to raise another $20-25 million in a private placement with the support of Citigroup Inc. As every month, VC Cafe is re-posting the “Invest in Israel” Newsletter, published by the investment promotion center of Israel’s Ministry of Industry, Trade and Labor , which offers many helpful tools for prospecting investors.

Is crowdfunding legal?

Startup Company Lawyer

Title III of the JOBS Act amends Section 4 of the Securities Act by adding a new paragraph (6), and requires the SEC to promulgate related rules to create an exemption from registration that permits a private company to sell securities in small amounts to large numbers of investors that are not accredited over a 12-month period. However, many private companies wish to protect such sensitive financial information and may be disinclined from utilizing the exemption for this reason.

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Market Saturation: Is It Too Late For You To Make Money Online?

Entrepreneurs-Journey.com by Yaro Starak

For example, I am starting to get offers for private placement ads. The concept of making money online through websites and blogs is no longer new, but only to those that have been exposed to this industry for some time now. The last time I checked, there are somewhere around five websites and blogs created every two minutes , which equates to millions more with each passing year.

Episode 8: Charlie’s Bcast Email, Startup Incubators, and 10 Reasons Why Startups Fail | The Bcast

Up and Running

They never worked with startups who needed to put together private placement memos for investors, capitalization tables and all of those things. This week we get an email from one of our listeners. Peter and Jonathan discuss startup incubators, and our guest Caroline talks to us about the “F” word and 10 reasons why startups fail. Subscribe: Stitcher | TuneIn | Pocket Casts | PlayerFM | Soundcloud. Do you have a question you’d like us to answer on the show?

Using warrants to pump up your VC valuation

www.mattbartus.com

Recent Popular Comments Cooley Releases Q3 2012 Venture Financing Report November 26, 2012 Cooley launches free privacy policy generator for startups October 5, 2012 SEC Proposes Amended Rules to Permit Publicity in Private Placements September 5, 2012 Convertible Equity – tipping the balance further in favor of founders September 5, 2012 Cooley Releases Q2 2012 Venture Financing Report September 3, 2012 Don’t blow up your Series A term sheet.

Why Co-Founders Are a Startup's Biggest Liability | The Startup Lawyer

thestartuplawyer.com

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A Step-By-Step Guide On How To Build A Profitable Niche Content Website

Entrepreneurs-Journey.com by Yaro Starak

Personally, a killer combination that has worked very well for me on all my niche websites is the following: contextual ads, private placement ads, sales of my own digital products, affiliate marketing, donations. In my first post titled, Why Leave A Six Figure Corporate Job For Internet Entrepreneurship? , I provided a brief background on who I am, what I do, why I know what I know and so forth.