SEC Regulation D – Private Offerings: NY Startup Law

Start-ups in New York looking for investment capital should consider the classification of investors that can and cannot partake in private offerings.  Under the Securities and Exchange Commission’s Regulation D, an organization may issue a private offering of stock to raise funds without officially registering to “go public.” We discussed the nature of Regulation D offerings, which are also called “private placements” in an earlier blog post. Only certain types of investors may participate in a Regulation D offering.  To understand why the SEC encourages certain kinds of investors over others, it is important to understand the different types of investors in the market: Accredited Investor: This is defined as an individual that has earned US$200,000 or more on an annual basis for the past two out of the three years and is likely to make that same amount this year. Alternatively, an accredited investor can fail to meet the income threshold,

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