| When <a rel="nofollow" | | | | businesses. The same holds true for Small Business |
| onclick="javascript:_gaq.push(['_trackPageview', ' | | | | Investment Companies (SBIC's) that are licensed by |
| outgoing/article_exit_link']);" href=" for venture | | | | the US federal government. In regards to angel |
| capital</a> there are a number of legal issues | | | | investors, raising capital from these individuals begins |
| that you will need to consider. Foremost, it should be | | | | to enter into the grey area of looking for venture |
| noted that only a qualified attorney who has special | | | | capital. Foremost, most angel investors (assuming |
| expertise in securities law can provide you with the | | | | that this is an arms length transaction) must be |
| necessary information regarding your specific needs. | | | | accredited investors. Please review our previous |
| This article is only intended to provide an overview | | | | articles in regards to the definition of an accredited |
| of some of the issues that you may encounter when | | | | and sophisticated investor (these are different terms |
| going through the capital raising process. | | | | according to the SEC). |
| | | | | As we have discussed earlier, it may be imperative |
| In regards to raising private capital, you cannot | | | | for you to have a private placement memorandum |
| actively advertise that you are seeking capital. | | | | (which may or not need to be filed with the SEC). |
| According to regulations set forth by the Securities | | | | This document, in a legal format, spells out the |
| and Exchange commission there are a number of | | | | amount of capital sought, investors' rights, and other |
| different regulations that you must adhere to when | | | | disclosures regarding risks related to your business |
| raising capital from private sources such as angel | | | | investments. Depending on the type of investment |
| investors or venture capital firms. Typically, you can | | | | that you are seeking, again – you may or not |
| approach venture capital firms without limitation as | | | | may not need to have this document drafted by a |
| they are in the business of providing capital for | | | | securities attorney. |