We were approached by a small company in the consumer goods business looking to raise capital to build inventory. It’s true, experience is everything, and we’re game to share. In our normal course of conducting due diligence, we discovered that the owner of the company previously had exited and sold another business and, rather than pay federal taxes, he had used the proceeds to improve his...
If you’re thinking of crooning “Blue Skies,” you’d be in the right state of mind. That’s because each state has its own state Securities laws, or “Blue Sky” laws, that further protect Investors from Securities fraud. Here’s a brief overview of what those laws do for you. In other articles, we’ve discussed federal Securities laws - the Securities Act of 1933 and the Securities Exchange Act of...
Accounting 101 – Not your best subject. But if you intend to invest in a private company, spend a few minutes on these crib notes. They may save you a bundle down the road. You may remember, from your freshman year accounting class, that there are three main financial statements that any Company needs to maintain: the Balance Sheet, the Income Statement, and the Cash Flow Statement. We’ll...
It’s hard enough keeping this baby in running condition. But, to get the best performance, you work with your mechanic closely, asking additional questions, avoiding risks where you can. While you rely on your mechanic, it just makes sense for you to have a deeper understanding… The same should be true of your investments. Here are a few guidelines to help keep your alternative investments...
The Federal government, and its regulatory agencies, are hard at work protecting investors. Here’s a handy précis of the rules and regulations that Issuers follow when introducing Private Placements. There is a broad body of law and regulations governing public Securities. What surprises many is the extent of the same for private Securities. Let’s review some of the principal laws and...
If a Broker-Dealer offers you Private Placement investment opportunities, wouldn’t you like to know that there’s some regulatory oversight over it? Let’s define both a Broker and a Dealer so that we’re on a level playing field. What is a Broker? According to the Securities Exchange Act of 1934 (the ”Exchange Act”), a Broker is “any person engaged in the business of effecting transactions in...
The following provides a brief review of the SEC Rules defining the manner of offering private Securities to Accredited Investors Regulation D was established by the SEC in the 1980s to define, more specifically, a manner of privately offering Securities. Most companies issuing private Securities do so by following one of the Rules within Regulation D. Rule 501 created the Accredited...
The information below provides a brief summary of SEC Rule 506(c) which allowed, for the first time, “general solicitations” of Private Placements to Accredited Investors. Regulation D was established by the SEC in the 1980’s to define more specifically a manner of privately offering Securities. Most companies issuing private Securities do so by following one of the Rules within Regulation D. ...
In the interest of accessibility, here are some terms that any investor should be familiary with.
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