Navigating Private Investments #

Whether you’re a founder looking to raise capital or an investor seeking new opportunities, understanding the landscape is key. Every investment opportunity is governed by two core concepts: fundraising regulations and security types.

Fundraising Regulations #

Before a company can offer an investment, it must follow a specific set of rules set by the U.S. Securities and Exchange Commission (SEC). These regulations ensure that investments are offered in a fair and transparent manner.

They answer crucial questions like:

• Who can invest? (Everyone, or only accredited investors?)

• How much money can be raised?

• Can the offering be publicly advertised?

Each regulation, like Regulation A+ or Regulation D, provides a different path for companies to raise capital, each with its own unique set of requirements and benefits.

Security Types 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:

  • Regulation A+ (The “Mini-IPO”)

  • Regulation CF (The Community Fundraise)

  • Regulation D, Rule 506(b) (The Private Club)

  • Regulation D, Rule 506(c) (The Publicly Advertised Exclusive)

• Learn About What You’re Investing In:

  • A Guide to Security Types

Resources #

• https://www.sec.gov/
• https://www.finra.org/
• https://www.investopedia.com/
• https://crowdstreet.com/resources
• https://www.ycombinator.com/documents