Author: Gerry M. Balboni
Start up, development stage, and “expansion stage” companies often need external financing. With a few exceptions, which are not generally applicable, obtaining external financing will almost certainly involve the issuance of a security. The company and those acting on its behalf must be cognizant that the offer and sale of a security is subject to concurrent state and federal regulation. of the state and federal securities laws and the restrictions they place on capital raising activities. This memorandum focuses on offers and sales of securities by an issuer and reviews the exemptions generally available to start up, development stage, and “expansion stage” companies.