Here we’ll discuss investment fund side letters. A side letter is an agreement between an investment fund sponsor and an investor giving the investor special rights or privileges. Note: This article will refer to “investors” (also known as LPs, limited partners, or investor members) and “sponsors” (also known as GPs, general partners, managing members, or Continue reading
Raising Money
Investment Fund Closing Timeline – 10 Steps
Here, we’ll discuss a simplified roadmap to closing your first investment fund. Each fund is unique and this article provides only a high-level overview. You’ll work with your legal counsel every step of the way to ensure you raise your investment fund efficiently and successfully. The 10 steps are as follows: Here’s a link to Continue reading
What Is a SAFE (Simple Agreement for Future Equity) in Startup Financing?
New companies looking to raise money have several options. Issuances of common stock, preferred stock, and convertible notes are all on the table. Here, we talk about one of the newcomers to the game of startup finance — the Simple Agreement for Future Equity (SAFE). Mom…Where Do SAFEs Come From? The SAFE was invented in 2013 Continue reading
The Difference Between Rule 506(b) and Rule 506(c) Private Placements
Are you thinking of raising money for your startup, investment fund, or real estate syndication? If so, be sure to remember the golden rule of securities law: every sale of securities must be (i) registered with the SEC or (ii) exempt from registration. Here, we’ll discuss Rule 506(b) and Rule 506(c) — two of the Continue reading
What Is a “Security” Under the Securities Act (And Why Does It Matter)?
Every sale of a security must be either (i) registered with the US Securities and Exchange Commission (the “SEC”) or (ii) exempt from registration. Sell a security without registration or an exemption and you’ll be in big trouble with the SEC. This fundamental rule applies to all kinds of securities offerings, from the sale of Continue reading
What Is an Accredited Investor? (And How to Become One)
Accredited investors get exclusive access to many of the most lucrative investments. But what is an accredited investor, and how do you become one? What Is an Accredited Investor? An accredited investor is an individual or entity that’s allowed to participate in certain investments that aren’t registered with the SEC (Securities and Exchange Commission). These Continue reading
How Do “Series A” Startup Financings Work?
If you want to grow your business, you’ll need access to capital. While money from friends and family can help get you off the ground, eventually you’ll want to consider outside investors. Here, we’ll cover the basics of Series A financing, an essential tool that helps startups accomplish their goals. What Is a Series A Continue reading