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 flags are self-evident. Here’s an example that nearly derailed a deal entirely. We were...
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) the services they receive, and (3) how they pay for these...
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 JOBS Act on December 22,...
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 for anyone wanting a quick refresher: The information...
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. In other articles, we’ve discussed federal Securities laws - the Securities Act of 1933 and the Securities...
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 are 5 basic questions...
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! A Summary of Terms (often called a Term Sheet) like the one described below, should be created and agreed to before you privately lend to a business. This...
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...
In the interest of accessibility, here are some terms that any investor should be familiary with.
