The mechanics of raising capital for your business

From the earliest "idea-stage" start-ups to some of the largest of the Fortune 500, most companies, even publicly traded ones, raise equity capital through private placements.

A private placement, sometimes referred to as a private offering, is a sale of "restricted securities" by an issuing company that is being made pursuant to an exemption from the registration requirements of the Securities Act of 1933. These include Regulation D, which covers sales to angel investors and venture capital funds, among other things.

The restricted securities are ineligible for resale into the public market until some conditions have been met. Either a resale registration statement must be filed with the Securities and Exchange Commission and declared effective, or resale must be permitted under an applicable rule such as Rule 144, which applies when the issuer of securities is a public company.

By: Matt Storms

Full Story: http://www.wistechnology.com/article.php?id=1650