Limited Liability Companies For Dummies, 3rd Edition

Chapter 11

Using Your LLC to Attract Investors

IN THIS CHAPTER

Taking advantage of what makes LLCs attractive to investors

Getting around securities laws (legally) with SEC registration exemptions

Navigating tricky state laws

If you’re an entrepreneur, one of your most fundamental tasks when starting a company is seeking out and acquiring capital to fund your startup. This process can be as simple as asking friends and family members to pull up their couch cushions and donate some extra change or as complex as raising millions in private equity or venture capital. Regardless of your methods or the amount you’re raising, you have to contend with some hurdles. Namely, the Securities and Exchange Commission (SEC) — a government agency endowed with the task of keeping the little guys from being swindled out of their life savings.

Luckily, when you know the federal and state securities laws you’re contending with and can navigate them with ease, raising financing should be a breeze. Well, aside from the talking people out of their money part; sometimes that’s easier said than done! Thankfully, you were smart enough to form an LLC for your fundraising activities, and with the flexibility ...