Rule 504

This rule is considered by many as the perfect answer for the company just starting out OR one that needs to raise less than $1 million. Regulation D Rule 504 offers such companies: An exemption to raise up to $1 million No disclosure criteria Few general solicitation and resale restrictions No limit as to the… Continue reading Rule 504

Rule 506: Offerings with no dollar limit

Under SEC Rule 506; an issuer may issue an unlimited amount of securities, with no dollar limit, to 35 unsophisticated investors plus any number of “accredited investors.” There are required disclosures, if a sale of securities includes purchasers who are not accredited investors. All non-accredited investors must be sophisticated and must sign an Investor Questionnaire… Continue reading Rule 506: Offerings with no dollar limit

Regulation D

For most entrepreneurs, the best vehicle to accomplish initial equity financing under an exemption is through the use of a Private Placement Memorandum (PPM) under Regulation D (Reg D), which is a limited offer and sale of their company’s stock, or securities, without registration under the Federal Securities Act of 1933. Some risks continue under… Continue reading Regulation D

Rule 505: Offerings of $5 million or less

Rule 505 is used for offerings of $5 million or less in any 12-month period and is restricted to 35 purchasers other than “accredited investors.” There are a number of required disclosures if the sale of securities includes investors who are not accredited investors: advertising and a general solicitation are prohibited, one must inform purchasers… Continue reading Rule 505: Offerings of $5 million or less