Strictly Business

A Business Law Blog for Entrepreneurs, Startups, Venture Capital, and the Private Fund Industry.

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New Options for Raising Capital for Startups and Growth Companies

July 20, 2017 by Alexander J. Davie

“illustrationTraditionally, when raising capital, an overwhelming majority of businesses have used Rule 506 of Regulation D, also often known as the “private placement exemption” as their exemption from securities registration requirements. In recent years, Congress, the SEC, and state regulators have enacted a number of alternative exemptions designed to make capital formation easier for growing businesses, such as equity crowdfunding and “mini-IPOs,” as well as made refinements to existing exemptions, such as Rule 147 (intrastate offerings) and Rule 504. In this post, I’ll provide an overview of these newer options. [Read more…]

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Filed Under: Startups and Venture Capital Tagged With: Capital Raising, Crowdfunding, Recent, Recent Startups, Regulation A, Rule 504, Rule 506

Negotiating a Convertible Note Financing

April 18, 2017 by Alexander J. Davie

convertible note financing A convertible note is a hybrid of debt and equity, and it’s a popular form of financing for two main reasons. First, convertible notes are generally easy and cost-effective, because they require little negotiation and paperwork. Second, they allow the parties to put off valuation until a later time, which is useful, because accurately valuing a new company from the outset can be difficult.

Before you venture into a convertible note financing, it’s important to have a strong grasp of the terms of the note and how it will convert to equity.

[Read more…]

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Filed Under: Startups and Venture Capital Tagged With: Capital Raising, Convertible Note, Recent, Recent Startups, Startups

5 Questions to Answer As You Prepare Your Startup for a Seed or Angel Round

June 14, 2016 by Alexander J. Davie

StartupLast month I wrote about the four stages of startup capital – (1) the seed round, (2) the angel round, (3) the venture round, and (4) the bridge/pre-ipo stage round. This month we’ll take a look at what startups need to do to prepare themselves for a seed or angel round. [Read more…]

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Filed Under: Startups and Venture Capital Tagged With: Angel Round, Capital Raising, Seed Round, Startup

About the editor

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Strictly Business is a business law blog for entrepreneurs, startups, venture capital, and the private fund industry. Its editor is Alexander J. Davie, an attorney at Riggs Davie PLC based in Nashville, Tennessee. His practice focuses on corporate, securities, and business law. He works mainly with technology companies, including startups and emerging companies, and private equity, venture capital, and hedge funds.
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