Research Start-Ups and Business Formations
The SEC Regulation D provides an exemption from the SEC registration requirement for the issuance of "private placements," meaning the issuance of "limited offerings" or securities. Regulation D also exempts these companies from issuing a prospectus. Companies qualify it they plan to raise under $1 million in a 12-month period or plan to seek funding under $5 million. Investors must be "accredited" by meeting specific net worth requirements. The number of investors is limited to 35 although read the CFR for full information.
Form D provides:
- a description of the security
- Entity type
- Industry group
- Issuer size
- Number of investors
- Amount offered and sold
- Minimum amount of investment accepted
- Use of proceeds
See CFR Title 17 Sec 230.504
CFR Title 17 Sec 230.506
SEC Rule 503
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