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:
- Learn About What You're Investing In: