Securities Law

Why is it so difficult for small business to raise capital? Because state and federal securities law can be difficult for the average entrepreneur to navigate. Arm yourself with what you need to know by reviewing the resources below.

Securities Law

Integration of securities offerings – how to avoid it. Doing two separate securities offerings less than six months apart can create complications – learn more about how to avoid this trap for the unwary.
What is a security and why does it matter? If something falls within the definition of a security under applicable law, it will be governed by extensive rules and regulations that can be quite complex and expensive to comply with.
Which states have a broader definition of securities (i.e. including pre-sales, memberships, etc.)? Click here for a list of states, but keep in mind that laws change all of the time!
Memberships as Securities: Under the federal definition, memberships would not be securities if the members join to get the benefits of a membership, but not for a financial return.  This may not be the case under state law.
What if I pay my investors in stuff rather than money?: Offering investors perks in such a way that the securities laws do not apply is the easiest way to raise money for a business venture.
Free Speech and Securities Regulation: Securities regulations prohibit speech and deny the public and press access to information published by issuers of unregistered securities.
California Capital Access Company – a new way to raise capital!  The California Capital Access Company is a little-known tool for funding California businesses.
NSMIA – a federal law that made capital raising a little easier:  NSMIA prevents the states from requiring state level registration in certain cases.
Crackdowns on online capital raising and secondary trading: Before using an online platform for capital raising, do some due diligence to make sure you don’t inadvertently violate the securities laws!
Diamonds, gold, and capital raising – how to fall outside the securities laws in California: Here is a summary of two cases in which the courts found the capital raising strategy to NOT be a security.
PART TWO: Section 4(2), Unregistered Public Offerings, and Offering Rescission: Read about why it is important to follow the rules when selling securities privately.

California Securities Law Exemptions

How the California 25102(n) Exemption Can Help You Sell Securities: This exemption allows public offerings if investors meet certain suitability requirements.
How the California 25102(f) Exemption Can Help You Sell Securities: Read about the friends and family exemption in California.

Federal Securities Law Exemptions

The Intrastate Exemption – This exemption recognizes that an issuer that is only offering and selling securities within one state and doing most of its business within that state is best left alone by the federal securities laws.
Rule 504 for Public Offerings  – This exemption allows you to do your offering in multiple states, as long as you comply with the state-level registration requirements and raise no more than $1 million per year.
Regulation A – This exemption allows a public offering for up to $5 million,and this amount will soon be increased to $50 million.
The Nonprofit Exemption – This exemption from the securities offering registration requirement is for charitable organizations.
The Farmer Coop Exemption – If a co-op qualifies as a tax-exempt farmers’ cooperative, it enjoys an extremely beneficial exemption from securities registration requirements.


Dive into the details with our guide to securities and capital raising decision tool.
Download now
(510) 834-4530

Port Workspaces

344 Thomas L Berkley Way
Oakland, CA 94612