Hello, I will be assisting you.
I'm not sure I quite understand the question. Are you concerned with any restriction on trading after the sale or are concerned about the time period available to you to raise a certain amount of money?
Actually both. But my current question was supposed to be aimed at the first part...the restriction on trading.
Let me answer the first part and if you still need additional info you can always start a new question and request me.
Actually one additional question, how much money are you trying to raise?
$10MM. If necessary, we could do 2 separate PPM's if your question revolves around funding limits inside of certain reg d offerings.
You are correct. Under Rule 505 of Reg D you are limited to raising 5M in any 12-month period. Generally there are no restrictions on sale. However since you need to raise 10MM you may need to use the exception outlined in Rule 506 and under that rule the equity cannot be freely traded on secondary markets. Also note that if raising money under Rule 505 you would to prepare a financial statement that need to be certified by an independent CPA.
I suppose that if you are willing to fund raise over the course of one year then under rule 505 you can do a 5M round now and another 5M round in 12 months with liquidity retained by your investors.
Please rate my service. Thank you for using Just Answer..
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).