A young company approaches you. “Invest in us,” they say, “and your shares will be worth millions.” What are they offering, and does the structure make the most sense for you and the company? For the past quarter-century, we’ve been approached by companies – some little more than concepts – that showed promise. Many satisfied More >
Direct Private Investments: Why Invest in Them?
Investing directly in private companies can give you more control over your investments, help small businesses across the nation, and add balance to your traditional investment-heavy portfolio. And it might also provide tax benefits. Here are two things I hope you take away from this article: Develop a basic understanding for Direct Private Investments (DPI) More >
Danger, Will Robinson
For those of us who remember “Lost in Space” (the 1965 TV series), these words are part of our lexicon. In the show, a robot would warn a young man living in space of impending danger. Well, some potential investors react the same way when a company pledges its assets as collateral. If the More >
Some Red Flags are Self-Evident
Look in any finance primer – you’ll see how highly structured and proscribed the public securities process is. Not so for private company securities. That’s why we spend so much time and effort up front on a deal doing our due diligence if for no other reason than to help our investors succeed. Some red More >
Regulation Best Interest has been approved, now what?
In the evening of June 5, 2019, the Securities and Exchange Commission approved its final rule regarding Regulation Best Interest and Form CRS. How will that impact you? The new rules are designed to enhance investor protections while preserving retail investor access and choice in: (1) the type of professional with whom they work, (2) More >
8,000+ locations and $6.1 Trillion Dollars in tax savings
If you’re an accredited investor, you’ve probably heard about Qualified Opportunity Zones (“QOZ”). Here’s a short guide to outline the what’s, why’s and who might consider this investment strategy. What opportunities and challenges do QOZs address? Opportunity zones were created to spur economic development in distressed communities across the nation by the Tax Cuts and More >
Debt & Equity Investment Overview
When we talk about private securities, they can be split into two basic categories: Debt & Equity. While there are many many, different flavors of each, every savvy investor needs to have a solid grasp on what makes one more appropriate than the other—especially before purchasing. We put together a slightly exhaustive overview of both More >
Blue Sky Laws: History and Application to Private Investments
If you’re thinking of Willie Nelson 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. More >
Private Equity Term Sheet: Typical Terms and Conditions
You’re considering an equity investment in a private company with exciting prospects… Great, but do you really know what your “equity” investment in the company will get you? Investment characteristics of one type of private equity investment can be very, very different from another. This guide can help you understand better what’s being offered to you. There More >
Private Lending Term Sheet: Typical Investment Terms and Conditions
What should you look for when making a private loan to a business? It’s very important that you understand the standard commitments a business Borrower should be making to you… and that they are part of your loan documentation! More >
Why Do Companies Use Debt Financing?
The following outlines the major reasons why businesses may choose to use debt financing over issuing equity when capital is needed. Businesses and other entities can finance their enterprises by issuing equity or using debt, such as borrowing funds through loans or by issuing notes. Unlike equity, debt has a specified interest rate and a schedule of dates when interest is to be paid and all the principal fully repaid. Many fast-growing companies would prefer to use More >
Private Placement Memorandum and Other Private Investment Documents
You’ve decided to invest in a short-term private debt Security. Or, perhaps, a private equity investment. Great! Now what? Let’s review what you can expect in the way of Closing Documents, such as the Private Placement Memorandum. Closing Documents include agreements between the Issuer and the Investor in which the parties commit to participate in the offering and state the specific terms of the investment relationship. The More >
Why Invest in Alternative Investments? Here are 3 Reasons.
Been watching the stock market recently? Does it make you feel warm and fuzzy, or, like many investors, do you feel a bit uncertain and powerless? If so, join other Investors seeking higher returns, lower volatility, less correlation, and greater flexibility across their portfolios by investing some of their wealth in “Alternative Investments.” More >
What Securities Laws and Regulations Govern Private Placements?
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. More >
Forms of Lending
The following defines the different types of loans. More >
What is a Broker-Dealer?
If a Broker-Dealer offers you Private Placement investment opportunities, wouldn’t you like to know that there’s some regulatory oversight over it? More >
Regulation D, Rule 506(c) Private Placements
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 More >
Regulation D, Rule 506(b) Private Placements
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 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. More >
Accredited Investor Questionnaire
The following form is one of the Private Placement Closing Documents to be executed by an Investor. It certifies that the Investor is Accredited. REGULATION D “ACCREDITED INVESTOR” INVESTOR QUESTIONNAIRE Regulation D Qualification Statement An investor represents to an issuer of securities that they undersigned qualify as an “accredited investor” pursuant to Regulation More >
Closing Documentation for Private Placement Investment Opportunities
The following describes the Closing Documents one is likely to receive from the Issuer of a Private Placement. Closing documents include agreements between the Issuer and the Investor wherein the parties commit to participate in the Offering and the specific terms of the investment relationship. These documents are executed by the Investor and/or by the More >
Debt Investment Overview
The information below provides an overview of debt-related investment, in particular Private Placement Offerings. Debt financing is raised by companies through the issuance of Securities called Promissory Notes, Senior Notes, Senior Secured Notes or Subordinated Notes. These terms indicated the underlying credit structure of a given debt Security and are described below. The amount of More >
Equity Investment Basics
The information below provides a brief overview of Equity Securities. Companies raise capital in the form of either equity or debt. Equity represents an ownership interest in a for-profit company where the Net Equity Value of the company (i.e., total assets less indebtedness) and any ongoing profits are owned proportionately by the holders of the More >
The SEC: Its Role with Private Equity and Private Finance
Enron. Bernie Madoff. WorldCom. Tyco International. Bre-X Minerals. Qwest Communications. Recognize these names? We’ve all heard the stories: rich schemers who deceive Investors, make false claims about their Companies, and pocket fraudulently generated profits while obliterating retirement savings from thousands of small (and large) Investors. Who protects us from cons like these? More >
