If you are a founder of a startup, you may have heard this before. You may not know what an accredited investor is, or you may not understand why it is incredibly important to only sell stock and notes to accredited investors. Here’s a quick primer on selling your startup’s securities.
Securities Laws
You’ve probably heard of the “Securities Laws.” Securities laws are the federal and state laws and regulations that govern the sale of securities, i.e., stocks, notes (including convertible notes), and other financial instruments. The securities laws are very complex, so I’m going to try and simplify what you need to know as regards accredited investors, however there are many other aspects of the securities laws you need to take into consideration. [Read more…]