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Who can be involved with raising equity capital for an acquisition?

A small private company with whom I'll be consulting wants me to help them attract equity and debt financing to fund an acquisition. How can I help them to attract equity financing without violating securities laws? I've heard that it's possible for me to participate in raising equity financing if I'm either an employee, a board member, or a shareholder. Is this true? Any help would be greatly appreciated.


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

The quick answer is yes.

Spend the money to contact an Attorney who specializes in SEC/Hedge Funds and get proper advice.

The penalties for doing it wrong and getting caught is worth the consultive fee.

John Herndon
Title: Senior Consultant
Company: NOWCFO
(Senior Consultant, NOWCFO) |

Overall, the issue you are addressing is covered under The Jobs Act. Under those guidelines, the following applies:
1. You cannot be compensated on the basis of how much capital is raised in funding.
2. If you insist on doing this, you should register with the SEC as a Broker or Investment Adviser (not to be confused with the Broker and Investment Adviser from Merrill Lynch or Smith Barney, E Trade or anything similar).
3. Suggest a flat fee per month for putting the deal together, it is the closest approximation of Arms Length you can get.

Kirk Otis
Title: Former President and CEO TriLumina
Company: Consulting
(Former President and CEO TriLumina, Consulting) |

If you have contingent comp you are generally a broker, and would need to have a Series 7 or 66 license to sell securities, to represent the client you need a Series 79. All of which will take time and cost money. However, you can be an employee or consultant receiving a salary or monthly fee and no incentive. You can secure funding from Investment Companies, but there are limits on what can be raised and what you can do to raise money under Reg D. Generally they try to keep this from being offered to the public at large. There are restrictions on advertising, how many people you can pitch/market to, limits on the number of investors, the amounts raised, and the investors must generally be Qualified Investors.


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