A Lawyers Guide To Raising Capital

    Coming in May 2021

    pdf_7

    A Lawyer’s Guide to Capital Raising is the only book ever published on the topic of capital raising that explains the law related to capital raising for general counsel lawyers, corporate lawyers, and business executives. One of the most unique features of this book is that it provides (1) a thousand foot view of the most important legal principles of capital raising law for executives, and (2) in later sections of the book, it furnishes an in depth analysis of capital raising law, making it an indispensable reference guide for general counsel attorneys and practitioners.

    Chapter 1:

    What is a security and why should an early stage business care?

    • a. What is the 1933 Act, the 1934 Act, and the 1940 Act in layman’s terms
    • b. What are the differences between the 1933 Act, the 1934 Act, and the 1940 Act in layman’s terms, and why do I care?

    Chapter 2:

    When is a promissory note a security and when isn’t it and why should an early stage business care?

    Chapter 3:

    What is an accredited investor, and what is the difference between an exempt offering and a registered offering?

    • a. What is an accredited investor and why should I care?
    • b. Exempt Offering
    • c. Registered Offering

    Chapter 4:

    When would I want to use an exempt offering?

    • a. What are the types of exempt offerings?
      • i. 504,
      • ii. 505,
      • iii. 506(b)
      • iv. 506(c)
      • v. 4(2) exemption,
      • vi. What is the significance of a "busted exemption."

    Chapter 5:

    When would I want to register an offering?

    • a. What are the types of registered public offerings, and when should I use them?
      • i. Intrastate
      • ii. Regulation A (tier 1 and 2)
      • iii. 504 path
      • iv. Portal Registration
      • v. S1 public Offerings

    Chapter 6:

    What is involved in reselling private securities?

    • a. Rule 144a
    • b. Rule 4a1.5
    • c. Rule 4a(7)

    Chapter 7:

    What is necessary to raise capital from investors, and why should an early stage business care?

    • a. Types of securities – equity, debt, convertible debt
    • b. PPM
      • i. When do I and when don’t I need to use a PPM,
      • ii. Fraud Provisions of 502
    • c. Accredited Investor Questionnaire
    • d. Subscription Agreement / Stock Purchase Agreement / Note Purchase Agreement
    • e. Executive Summary/ Business Plan
    • f. A strategy for raising capital (ie. soliciting friends and family, consultants, broker dealers)

    Chapter 8:

    What are the most common ways to raise capital, and why should an early stage business care?

    • a. Friends and Family
    • b. General Solicitation:
      • i. filling a room
      • ii. website optimization
    • c. Loading offering documents onto a portal
      • i. What is involved in this complicated and somewhat expensive process (who, what, when, where and why)?
    • d. Finding a broker dealer to raise capital?
      • i. What is involved in this complicated and somewhat expensive process (who, what, when, where and why)?
    • e. Finding an investment bank to raise capital?
      • i. What is involved in this complicated and somewhat expensive process (who, what, when, where and why)?

    Chapter 9:

    What are the ways to improve your chances of raising capital

    • a. Analyze your team and fill gaps
    • b. Don’t shoe string your marketing materials (make your executive summary and business plan institutional quality, even if it means hiring investment bankers to write them)
    • c. Plan for the process to take twice as long as you originally planned.

    Chapter 10:

    Who can sell my securities and raise capital for me for a fee (finder law)?

    • a. If I’m a principal of a company that is seeking capital, can I use the issuer exemption to raise capital for my company?
    • b. Unlicensed finders and their significance
    • c. Licensed placement agents and their significance

    Chapter 11:

    How do laws like the Investment Company Act and the Investment Advisors Act potentially limit my ability to raise capital, and how can I avoid them?

    Chapter 12:

    How does a fund offering different from a non-fund offering, and why should I care?

    • a. What is a fund?
    • b. What is a hedge fund?
    • c. What is the appropriate structure?
    • d. What is a sponsor?
    • e. What is a management entity?

    Chapter 13:

    What is the significance of blue sky laws in private placements?

    • a. Form D’s
      • i. What happens if I don’t file Form Ds

    Chapter 14:

    When should an investment offering be rescinded and when should it be updated or supplemented?

    Chapter 15:

    What are the parts of a private placement memorandum, and why are each important;

    • a. Executive Summary of the Business
    • b. Disclosure about Forward Looking Statements
    • c. Risk factors
    • d. Use of proceeds table
    • e. Capitalization table
    • f. Tax Section
      • i. Why is it important?
      • h. Summary of the offering
      • i. Summary of the Governing Documents
      • i. Distributions section

    Interested In Learning More?

    CONTACT US