Navigating Private Investments
Choose the fundraising regulation and security type before accepting an investment. The regulation controls who can invest, how much a company can raise, and which disclosures and reports apply. The security type defines the Investor's rights and the company's obligations.
Fundraising Regulations
Before a company can raise capital, it must follow the applicable rules set by the U.S. Securities and Exchange Commission (SEC). These regulations require fair and transparent fundraising.
They answer crucial questions like:
- Who can invest? (Everyone, or only accredited investors?)
- How much money can be raised?
- Can the fundraising be publicly advertised?
Each regulation, such as Regulation A+ or Regulation D, provides a different path for companies to raise capital. Each path has its own requirements and limits.
Security Types and ownership
When you invest, you are purchasing a "security." The security type defines your financial relationship with the company and what you get in return for your investment.
It answers fundamental questions like:
- Do I own a piece of the company? (Equity)
- Am I simply lending the company money? (Debt)
- Do I have a right to future ownership? (Convertible Instruments)
Understanding the difference between Common Stock, a SAFE, or an LLC Membership Unit is critical to knowing your rights, risks, and potential returns.
Explore Our Guides
To learn more, please explore our detailed compliance overviews on each of these topics.
- Learn About Fundraising Regulations:
- Learn About What You're Investing In: