Offerings Reg D and Reg A
Generally speaking, federal securities regulations and Blue Sky laws were established to protect unsophisticated investors from committing cash to investments that carry risks which are not fully disclosed or appreciated. Navigating these laws is critical to avoid liabilities in the future and can be daunting. However, lawyers who specialize in securities laws can streamline the process and help you structure your investment vehicle and capital raise.
When you first embark on your capital raise, you’ll learn about federal and state securities laws. They regulate the types of interests that can be sold to investors, who can buy them and what means the principal can use to market the investment opportunity at hand.
Under the Securities Act of 1933 (the “Act”), any offer or sale of securities must either be registered with the SEC or qualify for an exemption from the Act’s registration requirements. The first step is to determine whether the investments you are soliciting for your project are “securities”. Per the Act, “security” is very broadly defined and includes, “investment contracts,” which are contracts providing for the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.