What is a Regulation D Securities Offering?

Raising capital from investors to fund your company is referred to as an offering of securities. An offering includes raising capital from your family or friends or employees. Selling a stock for money, services or property is an offering even though it may be small dollar amounts. It doesn't matter if it's privately sold and sold to a very limited number of people the only general exceptions to this is when you're selling stock to other founding partners officers of the company or board members. An offering can be either private or public. As we explain later, a public offering is generally not the best option for most, simply because of the expense associated with a public offering. A private placement is affordable to all.

You are doing a Securities Offering whether you are raising capital through a private equity placement or a public offering such as an IPO.

What is an Offering Memorandum?

A business plan is not an offering memorandum. The contents of the business plan are generally incorporated into the offering memorandum. When a company or individual seeks to raise capital from investors even in a private investor transaction the securities laws both federal and state impose obligations to provide full and fair disclosure. Full and fair disclosure requirements apply whether the company is a startup, emerging growth company or company that's been in business for 50 years.

When is an offering memo required?

A securities offering memorandum is required for both a private placement offering or a public offering. In a public offering it is called a prospectus. An offering memo is required to raise money from investors outside of your immediate family and/or relatives by marriage. Generally speaking in many cases offering memorandum is also required to raise money from your friends and from friends of the family.

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