By William Rosellini – Facebook’s use of Regulation D was vital to their success. If you’re like us you’re probably wondering how Facebook got started. Well, according to the SEC’s archives, they had very humble beginnings, just like every other startup. Facebook, Twitter, Tesla, and thousands of other companies have gotten started using a purposely engineered loophole in the securities laws, also known as Regulation D of the Securities Act of 1933.
Regulation D is used to keep companies from going through the time-consuming and expensive process of registering their securities with the SEC, a process for publicly traded companies. No matter how small your company is, and no matter how small the investment is, Regulation D should probably be used to help you raise capital.
As you can see from the Form D below (submit the form to view), Facebook had early wisdom of this loophole when they used the proper forms to take their very first investment of $6,790. They then went on to conduct numerous follow-on offerings using Reg D each time, until finally they filed their S-1 to start the process of going public.
It’s important to also acknowledge that the stock being sold under Reg D was then converted into other types of shares: preferred, common, and yes, some tradable in the IPO.
William Rosellini is the President of CytoImmune Therapeutics, Inc, a clinical stage biotechnology company. Previously, William Rosellini was the CEO of Perimeter Medical, Inc. (TSX:V “PINK”) where he oversaw 2 510K clearances, an RTO and $30M in capital raised. Prior to that William Rosellini was the CEO Nexeon Medsystems, Inc., (“OTC:QB, NXNN”)a medicaldevice manufacturing company that went public in 2017. Before that William Rosellini founded, raised $16M across A/B rounds and led Lexington Technology Group, LLC, a database company commercializing an electronic health record database solution to an exit (“DSS” NYSE). Before that William Rosellini founded Sarif Biomedical LLC, a stereotactic cancer microsurgery with IP spun-out of Medtronic and led company to an exit with Marathon Patent Group, Inc. (“MARA” NSDQ). William Rosellini subsequently served on the Marathon board of directors and chaired the Audit committee. William Rosellini completed 2 acquisitions to form Telemend Medical, Inc. a clinical engineering services company and led that company to an exit in 2016. William Rosellini was also CEO at Microtransponder, an implantable neurostimulation developer with solutions for stroke rehabilitation. William Rosellini is a former minor league pitcher with the Diamondbacks of the Arizona League, holds a JD, MBA, MS of Accounting, MS of Computational Biology, MS of Neuroscience and MS of Regulatory Science.