Securities Explained

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 >

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 >

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 >

Your brother-in-law tells you this Company is going to revolutionize the (…pick an industry).  And these people are incredibly experienced in this field.  “Let’s invest together,” he tells you. Well … let’s take a deep breath and think about private investing and what it might mean for you. More >

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 >

Everybody’s talking about alternative investments, but there seems to be a lot of confusion about what they are. Well, here’s our stab at defining alternative investments — what they are and what they’re not. If you’re interested in learning about the alternative investments, this is a good place to start. More >

The following outlines the different approaches required for Investors to qualify as Accredited Investors under Rules 506(b) and 506(c). More >

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 >

We’ve made the point more than once in these articles: investing in an alternative investment, and particularly in a private Company, is a high-risk gambit.    Where there may be rewards, there are most certainly risks.  So, do your homework and think about the following four questions carefully.  It’s crucial that Investors in alternative investments carefully evaluate whether the opportunity is SUITABLE More >

The following defines the different types of loans. More >

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 >

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 >

The following form is one of the Private Placement Closing Documents to be executed by an Investor.  It certifies that the Investor is Accredited. To download a PDF of our Accredited Investor Questionnaire click HERE.   REGULATION D “ACCREDITED INVESTOR” INVESTOR QUESTIONNAIRE REGULATION D QUALIFICATION STATEMENT An investor represents to an issuer of securities that they undersigned More >

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 >

Recognizing that access to capital is critical to the health of smaller companies which generate about 50% of U.S. job growth, the Congress passed the Jumpstart Our Business Startups (JOBS) Act in 2012, which set the stage for the development of equity Crowdfunding in the U.S. The JOBS Act The JOBS Act includes several provisions More >

The following briefly reviews the history of securities exchanges, the establishment of the first U.S. federal securities law, touches on the regulatory burden that is currently imposed on Broker-Dealers, and references the exciting outgrowth of recent legislation authorizing Crowdfunding. While privately placed Securities represent, arguably, the oldest and least efficient form of investment banking, this More >

The following provides general background on, and underscores certain risks to Investors associated with, Private Placements. Private Offerings can be purchased directly from the Issuer of the Security during the Offering period or through an agented, “best efforts” process managed by a FINRA-registered Broker-Dealer acting as a Placement Agent.  Under U.S. law, other than the More >

The following offers an explanation behind increasing investor allocations into Alternative Investments. The investment returns of many Alternative Investments result from the fundamental performance of the underlying business or project versus the more general swings of the equity and bond (Fixed Income) markets.  Alternative Investments tend to offer Total Returns as well as Non-Correlated Returns based More >

This information summarizes important risk-related considerations for Investors making Alternative Investments. Evaluating a potential investment is, arguably, the most important aspect of any investing activity, whether as part of a private Securities Offering or for a publicly registered investment. No investment is riskless, and losses will inevitably happen within a portfolio. Limiting losses and achieving More >

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 More >

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 More >

The following reviews the principal regulations which governs Private Placement offerings of securities and describes allowable investor participants. Private Placements are Offerings of Securities wherein the transaction and the related securities do not follow the public registration requirements of the Securities Exchange Commission (“SEC”).  They are traditionally offered in a non-public manner (i.e., without public More >

Below is a listing of the various categories of private Alternative Investments which comprise Carofin Offerings: For more detail regarding either debt or equity Offerings, please read “Private Placements: Debt Investment Overview,” or “Equity Investment Basics.”  

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 >

We get calls every week about another alternative investment opportunity. Maybe you do, too. Before investing in alternative investments, it might help to understand certain limitations and challenges that these present. More >