Thank you for purchasing Raise Capital on Your Own Terms: How to Fund Your Business without Selling Your Soul. The information below provides supplemental resources to help you create your fundraising strategy.
Please enjoy! Feel free to email us at customercare@jennykassan.com if you have any questions or comments.
Note that the following resources will download automatically when you click on them.
New – Preferred Equity Term Sheet
Go here to see the National Venture Capital Association model term sheet, as well as other legal documents used in venture deals: https://nvca.org/model-legal-documents/
There have been several law changes since the book was published.
Here is a blog post I wrote when the SEC adopted new rules covering many different aspects of capital raising: https://www.jennykassan.com/blog/new-rules-new-possibilities/
Here are the main changes:
1. You can now raise up to $10 million under Rule 504.
2. Under Regulation Crowdfunding, you can now raise up to $5 million and several other changes have been made such as the per investor caps, the amounts you can raise without the need for reviewed or audited financials, and what information counts as “terms.” See the resources below for details on current Reg CF rules.
3. The rules regarding integration of securities offerings have been completely changed and can now be found in Rule 152 of the federal securities regulations.
4. You can now raise up to $75 million under Regulation A.
Go here to learn about state-level crowdfunding laws: https://www.nasaa.org/industry-resources/securities-issuers/intrastate-crowdfunding-directory/.
State registered DPO Issues to Be Aware Of
If an investor purchases securities from your business (i.e. invests in equity or debt in your business), can he or she just turn around and sell that investment to someone else?
The answer to that depends on the regulations under which the securities were initially sold. Securities sold in a private offering are generally considered “restricted securities.” This means that the resale of the security is not allowed unless it complies with state and federal rules governing resales. Investors often must attest that they are purchasing the securities with an intention to hold them and not to re-sell them.
Securities sold in an offering under Regulation Crowdfunding are not restricted but cannot be resold for one year (except under limited circumstances) and resales are subject to state securities laws.
Anyone who wants to buy or sell securities that were purchased from the issuer should check with a knowledgeable securities attorney to ensure that the resale is legal under both state and federal law.
In addition to the examples below, you can see private placement templates here:
Check out this blog post: https://www.jennykassan.com/blog/frequently-asked-questions-from-investors-and-how-to-answer-them/
Anyone with a retirement account can set up a self-directed IRA and invest in your business. Here is an article with some details: http://slowmoneynorcal.org/self-directed-iras-and-the-slow-money-investor/
Please review the attached information about self-directed IRAs.
Here is another resource about self-directed investing from a solo 401(k): https://youtu.be/taTzvtaJiCE
Here are some custodians for self-directed IRAs that have been recommended to us (we are not affiliated in any way with these companies – be sure to do your own due diligence!):
https://www.theentrustgroup.com/
Download the primer below and share it with your potential investors.
AMS Self-Directed IRA Investing
Also, check out this book on the topic: Put Your Money Where Your Life Is: How to Invest Locally Using Self-Directed IRAs and Solo 401(k)s by Michael Shuman.
If you would like even more resources and support on your capital raising journey, visit the Resources Page on our website.
Errata
Here are some errors to watch out for in the book:
Page 40: At the end of the first paragraph “in the popular media” should be deleted.
Page 160: In the first sentence under the heading Share Your Vision, the quote should say “Investors want to invest in people.” It should not say “Investors want to pretend to invest in people.” The words “pretend to” should be removed.
Legal Disclaimer
The information provided above does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only. Information provided may not constitute the most up-to-date legal or other information.
Structuring and funding a business are complicated endeavors governed by complex local, state, and federal laws. You should not undertake such activities without obtaining the advice of a competent attorney and tax advisor. You should not act or refrain from acting on the basis of the information you receive above without first seeking legal and tax advice for your particular situation.
We may share links to third-party websites. Such links are only for your convenience and do not constitute recommendations or endorsements.
Use of, and access to, this information does not create an attorney-client relationship between you and The Kassan Group or any of its agents or representatives.