Five Securities Pitfalls For Founders & CEOs

When it comes to capital formation, equity markets or securities compliance, any mention of the Securities and Exchange Commission (SEC) usually sends entrepreneurs, founders and tech experts ducking for cover. SEC examinations are stressful, time consuming, costly and rarely leave anyone feeling good about the process. The goal of this article is to help small business investors, small and emerging companies and beginners avoid common pitfalls when raising money in the capital markets.

Identifying and locating potential investors can be difficult for small business who are seeking to raise capital. "It becomes even more challenging if the amount sought (e.g., less than $5 million) is below a level that would attract venture capital or a registered broker-dealer, but beyond the levels that can be provided by friends and family and personal financing."¹ As we exit a period of historically low interest rates and as equity markets tighten, raising capital will likely