If you have decided to raise capital for your business, make sure you comply with the securities laws in general (both Federal and State) and with anti-fraud securities laws in particular. Do not make the mistake shared by many issuers of just hoping for the best. Otherwise, if your company should fail later, its officers and directors may be liable to investors for the money that they lost and/or face civil suits, regulatory investigations or criminal actions.
Andrew C. Coté, LLC acts as a securities counselor and compliance consultant for both smaller companies seeking capital to expand and larger privately-owned companies interested in becoming publicly traded. Below are some brief definitions of some of the more usual ways of raising capital although we should stress that we have also worked with clients on other methods.
Private Placement is a direct private offering of securities to a limited number of generally accredited investors. Under the Securities Act of 1933 your private placement is exempt from public registration but still requires careful compliance with the terms and restrictions of Regulation D and the preparation of a private placement memorandum (PPM).
Initial Public Offering The Initial Public Offering (IPO) is the first offering of a sale of publicly traded stock by your company to the public. IPO's are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. Once your company is listed, you will be able to issue further shares and provide your company with capital for expansion without incurring any debt.
Intrastate Offering This is a securities offering limited to investors residing within one specific state which is often done to avoid SEC registration requirements.
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