Regulation D Private Placements
Internet Securities® helps technology companies raise capital in the private equity markets. Internet Securities® conducts these private placements in accordance with SEC Regulation D requirements.
These private issues are exempt from federal registration with the SEC and can be sold to a maximum of 35 “non-accredited” investors and an unlimited number of accredited investors. Generally, an accredited investor is a wealthy investor. An accredited investor is defined under SEC Rule 501 as a purchaser who meets one of the following tests:
- Individual with a net worth of $1,000,000.
- Individual with annual income of $200,000 a year for the past 2 years; or couple with a joint income of $300,000; and a reasonable expectation of continuing to earn that level of income in the future.
- Individual who is an officer or director of the issuer.
- Financial institutions such as banks, insurance companies, mutual funds, with assets in excess of $5,000,000.
- Non-profit institutional investors such as pension plans and college endowment funds with assets in excess of $5,000,000.
Even though these issues are exempt from registration and prospectus requirements, full disclosure to investors must be given to investors through an “Offering Circular.” All non-accredited purchasers must be “sophisticated” investors. This means that the investor is able to review and evaluate the merits of the issue. It is the issuer’s responsibility to insure that all non-accredited investors are sophisticated.
Internet Securities® private equity underwriting service offerings include:
- Providing valuation analysis;
- Creating private placement memorandums (offering circular);
- Maintaining Form D;
- Establishing and coordinating escrow agreements;
- Locating qualified and suitable investors within Internet Securities’ Investor Network;
- Assisting technology companies with positioning and corporate development;
- Providing follow on investor support through equity research.