Raising Entrepreneurial Capital

sions of the securities laws. This means that any information a company

provides to investors must be free from false or misleading statements.

Similarly, a company should not exclude any infor mation if the omission

makes that which is provided to investors false or misleading.

While other rules under Reg D allowing raising more funds, Rule 504 is

the only one that permits an unlimited number of investors. Rule 504 allows

the issuer to ‘‘generally solicit,’’ or advertise, for subscribers to an offering.

Some states have been quite lenient in allowing it.

Rule 504 provides for sales of securities of either debt or equity. This

opens the door for combinations ...