In spite of greater informality, when a startup company raises money from the founder's family and friends, that company is still making a securities offering, and so must either comply with federal and state securities laws or structure their offering in such a way as to be exempt. In this post, Arina Shulga explains how to fall into the most common exemptions provided by federal securities laws for this round of financing, and also gives an example of the kinds of costs which state securities laws will likely impose.
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Family and Friends Round of Financing: How to Secure Financing and Comply with Securities Laws