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Category: Business Law
Satisfied Customers: 4634
Experience:  23 Years business & securities law, NY and FL bars. SEC all states.
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I would like to help startup businesses get financing. I want

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I would like to help startup businesses get financing. I want to be able to connect startups seeking money with individuals who are willing to invest in startups based on receiving ownership in the company.

So can a start up take money in exchange for a % of ownership. Would the startup business have to be setup a certain way, are their limitations (like who can invest)?

Notes: This is for USA


Any company can accept money in exchange for ownership interests. If the company is a corporation the investor will receive stock. If it is an LLC the investor will become a member of the LLC and the money he invests will become his capital contribution to the LLC. The securities laws of the USA may come into play here, if shares in the company are being offered to or sold to a large number of investors. In that case, the stock may be viewed as a security which requires registration under the securities laws, or an exemption from registration. If this is the case, the company needs to retain a securities attorney.

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