Raising money for your bootstrapped startup from wherever or whomever is willing to give it often seems like an attractive path for founders. And given our current unprecedented global circumstances, it might even seem necessary for you to keep the lights on. But you can’t take money from just anyone – under U.S. Securities and Exchange Commission (SEC) rules, it’s critical that you consider whether each person or entity that invests in your company is an “accredited investor.”
We are frequently asked about these rules by entrepreneurs, particularly those looking to raise capital for the first time. In the overwhelming majority of cases, companies tend to stick to accredited investors, even if it means turning down checks from friends and family.
To read the full article in the National Law Review, click here.
Caroline Cherkassky: Caroline Cherkassky is a Partner of the firm. Caroline’s practice focuses on advising venture capital firms, angel investors and emerging growth, development stage, and middle market companies on a variety of matters, including venture capital and other financings, employee compensation, securities laws compliance, technology transactions, mergers and acquisitions, stockholder agreements, equity incentive plans, corporate governance, and other general corporate matters. She regularly serves as outside general counsel to early-stage companies and also advises executives regarding employment and compensation matters. Caroline is a frequent speaker on fundraising essentials for emerging growth companies.
Brent Armitage: Brent Armitage is an Associate of the Firm. Brent’s practice focuses on corporate transactions, including venture capital and private equity financings, mergers and acquisitions, commercial agreements, securities law compliance, and other general corporate and business matters.
About Stubbs Alderton & Markiles’ Venture Capital & Emerging Growth Practice
As a result of the Firm’s deep roots in the emerging growth market, Stubbs Alderton & Markiles understands the unique practical business needs of early-stage and high-growth companies. The Firm typically acts as outside general counsel to its emerging growth clients, including participating in board-level discussions and serving as an extension of the management team. The Firm strives to understand its clients’ business and markets and give them senior-level attention, which enables the Firm to provide practical and cost-effective legal advice. Representing private companies as they seek funding from venture capital firms, angel investors or other investors has been a key component of the Firm’s practice. The Firm also represents and has extensive relationships with the most prominent venture capital firms and angel investor groups in Southern California. The Firm has extensive experience in advising on a wide range of financing structures, including seed and angel investor financings, venture capital investments, private equity and other institutional financings, bridge loans, and PIPE transactions for public companies. The Firm’s representation of cutting-edge companies and leading investors allows it to stay apprised of developing market trends and, where appropriate, to make introductions to investors and companies.