Equity Investment Legal Docs

by a searcher from Tulane University - A. B. Freeman School of Business

2 years ago

We are raising equity from investors and want to get an understanding of what kinds of legal documentation are needed (accredited investor form, etc.). We have talked to an attorney who believes that a full PPM might be overkill so we wanted to see what other options people have used in this same scenario.

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investor from Columbia University

Agree with Search Fund Primer comment. Answer will depend on how many and what types of investors as well as how you sourced them. But definitely should consult with an attorney that knows how to do this.

11 months ago | like reply | 0 likes

professional from University of Denver

If we have a client that is raising money from accredited investors only under a 506(b) exemption, we oftentimes advise them to use a beefed up subscription agreement with a short description of the business and risk factors, with a copy of the LLC Agreement (or corporate documents) attached. We would also include an Accredited Investor Questionnaire. With a 506(b) offering with only accredited investors, there are no mandatory disclosure requirements, however, you are always subject to the anti-fraud rules.

2 years ago | like reply | 0 likes

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