EFim08Ed3 - Chapter 8 SECURITIES LAW CONSIDERATIONS WHEN...

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Chapter 8 SECURITIES LAW CONSIDERATIONS WHEN OBTAINING VENTURE FINANCING FOCUS In this chapter we introduce several major legal aspects of fundraising for the new venture. We discuss the central role of the Securities Act of 1933 and the exemptions available to ventures seeking to issue securities without having to register them with the Securities and Exchange Commission. LEARNING OBJECTIVES 1. Identify four relevant components of the federal securities laws 2. Explain what is meant by “blue sky” laws 3. Define “security” according to the Securities Act of 1933 and explain why such a designation matters 4. Describe what is involved in registering securities with the Securities and Exchange Commission (SEC) 5. Identify some of the securities that are exempt from registration with the SEC 6. Identify some transaction exemptions granted under the Securities Act of 1933 7. Describe and discuss how the SEC’s Regulation D serves as a securities registration “safe harbor” 8. Explain how Rules 504, 505, and 506 of Regulation D differ from one another 9. Describe Regulation A is and explain how and when it is used CHAPTER OUTLINE 8.1 REVIEW OF SOURCES OF EXTERNAL VENTURE FINANCING 8.2 OVERVIEW OF FEDERAL AND STATE SECURITIES LAWS A. Securities Act of 1933 B. Securities Exchange Act of 1934 C. Investment Company Act of 1940 D. Investment Advisers Act of 1940 E. State Securities Regulation: “Blue-Sky” Laws 8.3 PROCESS FOR DETERMINING WHETHER SECURITIES MUST BE REGISTERED A. Offer and Sale Terms B. What is a Security? 8.4 REGISTRATION OF SECURITIES UNDER THE SECURITIES ACT OF 1933 REGISTRATION OF SECURITIES UNDER THE SECURITIES ACT OF 1933 8.5 SECURITY EXEMPTIONS FROM REGISTRATION UNDER THE 1933 ACT 8.6 TRANSACTION EXEMPTIONS FROM REGISTRATION UNDER THE 1933 ACT A. Private Offering Exemption 133
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Chapter 8: Securities Law Considerations When Obtaining Venture Financing B. Accredited Investor Exemption 8.7 SEC’S REGULATION D: SAFE-HARBOR EXEMPTIONS A. Rule 504: Exemption for Limited Offerings and Sales of Securities Not Exceeding $1 Million B. Rule 505: Exemption for Limited Offers and Sales of Securities Not Exceeding $5 Million C. Rule 506: Exemption for Limited Offers and Sales Without Regard to Dollar Amount of Offering 8.8 REGULATION A SECURITY EXEMPTION A. Rule 701 (§ 230.701) B. Rule 1001 (§ 207.1001) 8.9 PARTIAL AND FULL REGISTRATION BREAKS FOR SMALL BUSINESS A. Regulation A (§ 230.251--§ 230.263) B. Regulation SB SUMMARY APPENDIX A: SCHEDULE A Requirements for Registration of Securities other than a Security Issued by Foreign Government or Political Subdivision Thereof APPENDIX B: SELEICTED REGULATION D MATERIALS Rule 501: Definitions and Terms used in Regulation D Rule 502: General Conditions to be Met Rule 503: Filing of Notice of Sales Rule 507: Reg D Disqualification Provisions Rule 508: Reg D Insignificant Deviations Clause Rule 144 APPENDIX C: OTHER FORMS OF REGISTRATION EXEMPTIONS AND BREAKS Rule 701 Rule 1001 Regulation SB
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This note was uploaded on 12/05/2009 for the course FIN Fin 595 taught by Professor Shabbir during the Spring '09 term at CSU Dominguez Hills.

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EFim08Ed3 - Chapter 8 SECURITIES LAW CONSIDERATIONS WHEN...

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