Seven Steps To Raising Capital – William Rosellini

Preparing a Regulation D securities sale involves seven steps to raising capital:

1. A Great Business Idea.

2. A Great Business Plan:
A full copy of the business plan should be included in the PPM (see below) as an Exhibit. See sample business plans.

3. Investment Layout & Disclosure Documents: Most entrepreneurs are not experts at raising capital, thus typically have poorly structured investments. An improper investment structure will portray an unprofessional image to potential investors. The first step in an offering is properly developing the structure. Structuring usually includes, setting stock price or note amounts, determining how much of the company to sell (in equity transactions), which Reg D program to use, setting the maturity date and rate of return for promissory notes (in debt situations), share allocations to principals (so they maintain a set amount of control in the company), minimum and maximum offering amounts which set the effective range of the offering, minimum amount of investment per investor, etc.

4. Document Creation: Preparing an offering involves the creation of the Regulation D Offering documents.

These documents include:

– Private Placement Memorandum: The Private Placement Memorandum, or “PPM”, is the document that discloses all required information to the investors about the company, proposed operations, the transaction structure (whether you are selling equity ownership or raising debt financing from the investors), the terms of the investment (share price, note amounts, maturity dates, etc.), risks involved, etc. Note: This document typically contains much of the information found in a business plan and also includes an extensive “return on investment” structure, along with an investment contract or “Subscription Agreement” (see next bullet point).

– Investor Suitability Questionnaire: This questionnaire must be completed by each investor and attached to the Subscription Agreement. This document qualifies the investor as an Accredited Investor.

– Subscription Agreement: The Subscription Agreement explains the terms and conditions of the offering. It is the “investment contract” for purchasing the securities. Typically an investor will complete this document and then attach a check for the investment.

– Promissory Note: In debt offerings you need to have a Promissory Note outlining the terms of the loan arrangement with the investors. The note is the actual “loan document” between the company and the investor.

5. Form D SEC Filing: The Form D is the form filing that is sent to the SEC in Washington, DC. It notifies the SEC that you are using the Regulation D program and provides them basic information on the company and the offering. Note: It is not an approval document or registration, rather it is a filing that notifies the SEC that you have a Regulation D Offering in place.

6. Marketing and Capital Acceptance: The offering is now ready for marketing to investors. The JOBS Act of 2012 has reversed a 80 year old rule whereby solicitation or advertising to investors was strictly prohibited. Investors can now advertise their offerings to accredited investors provided they file Form D and notify the SEC that they intend to use general solicitation; and

7. State Form D Filing: Also called “Blue Sky” Filings, most states require a specific form to be filed along with a copy of the SEC Form D and some require a copy of the PPM. Nearly all states charge a fee ranging from $50 to $1,500. In most states the form does not need to be filed until capital has been received from an investor in that state. After receiving the capital you typically have 15 days to file the appropriate documentation, with a few exceptions like New York, who requires filing prior to raising capital.

About :

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.

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