You have an idea. You form a company. Now you want to raise money from investors (or even friends and family), maybe through the sale of ownership, borrowing money, or a loan that could convert into ownership in the future. Seems straightforward, right?
Well, all of those interests and rights that you are considering are almost certainly going to be classfied as “securities” under applicable law. Selling securities, in fact, is a complex process that requires careful navigation and thoughtful representation to not only protect your position from an ownership and contractual standpoint, but to ensure you’re abiding by both federal and state laws, and regulations issued in connection with the same by enforcement arms such the Securities and Exchange Commission (SEC).
When it comes to selling securities, you have essentially three options:...Read More