What Is a "Private Placement Memorandum" and why is it important to raising capital? My company is a start-up with very little in assets - are there financial requirements or minimum net worth requirements to use these programs? Is there any one industry that has better success with these programs than others? How complicated is this process? Will my company be a public company at the end of this process? Doesn't my company have to go through an expensive registration process with the Securities and Exchange Commission before I can sell our company's stock? What are the related costs and fees to an offering? Can we use the programs to raise capital for a real estate transaction? Our company tried to get a business loan at a local bank but they turned us down - does this hamper our ability to successfully use these programs? I don't have a good personal credit history - is this a factor in using these programs? Do I have to personally guarantee the invested capital? How much of my company do I need to sell to raise capital? What type of return do investors look for? Isn't structuring a securities offering difficult? I don't have much experience in securities. How long does it take to structure the offering memorandum and have the company ready to market its stock to investors? How long does it take to raise capital once we have completed the offering memorandum and filed the Form D with the SEC?

	What Is a "Private Placement Memorandum" and why is it important to raising capital? A private placement memorandum (PPM) is the document that discloses everything the investor needs to know to make an informed investment decision. This includes: the offering structure, the share structure of the company, SEC disclosures about the shares being purchased, company information, information on company operations, risks involved with the investment, management information, use of proceeds, information on certain transactions that could affect the investor, and investor suitability data. The PPM also includes the subscription agreement which is the actual "sales contract" for the shares of stock. This is the document that the investor will sign and send in with their investment funds. The PPM is very important because it provides the investor with all of the prescribed data they will need to make an investment decision and includes the actual documentation to effect the investment transaction. PPM's are designed as a stand-alone document - meaning that there need not be other information presented to the investor for them to make an accurate investment decision. Many companies will attach their business plans to the PPM as supporting documentation. This is an acceptable practice so long as the information in the business plan properly corresponds with the information in the PPM and that the investor is made aware that the business plan alone does not constitute an offer to sell securities - only the PPM can make that offer. Go to Top

	My company is a start-up with very little in assets - are there financial requirements or minimum net worth requirements to use these programs? No, not for the 504 and 506 programs. A substantial number of companies that successfully use the Regulation D programs are recently formed start-up companies or seed capital situations. Go to Top

	Is there any one industry that has better success with these programs than others? No, not necessarily. If your company is seeking capital from investors then you will definitely benefit from the structure of a Regulation D Offering - whether you are in Internet, bio-tech, high-technology, manufacturing, real estate, consumer services, etc. Go to Top

	How complicated is this process? While some of the items discussed in our website may seem a little overwhelming the process for preparing a Regulation D Offering is actually very straightforward. We have designed our services to be very step-by-step oriented and we include offering support and consulting at no extra charge. We will ensure that you utilize the Regulation D programs efficiently and effectively. Go to Top

	Will my company be a public company at the end of this process? Absolutely not - you will still be a private company. The only difference is that investors have purchased a portion of your company's stock and will share proportionally in the success of the company. Go to Top

	Doesn't my company have to go through an expensive registration process with the Securities and Exchange Commission before I can sell our company's stock? Not with a Regulation D Offering. These offerings were designed to be utilized by companies that needed to raise capital in amounts much smaller than a traditional IPO (typical companies raise between $50,000 to $10,000,000 under Regulation D). The SEC only requires that an 8 page compliance document (Form D) be filed and it is an "information only" filing - not a filing that is subject to approvals or reviews. Go to Top

	What are the related costs and fees to an offering? The cost to become a subscriber to Capital X Ventures, Inc.  is $2,500.00. This is a fixed fee to help support some of the preparation and distribution  cost.  The average commission offered to registered brokers for selling the stock is 10% (which is added to the total amount the company needs to equal the total offering amount - the commissions are deducted from offering proceeds). You do not have to have a broker to sell your securities - as a principal of the company you can sell the stock directly to investors and bypass paying commissions to brokers. Some states have a filing fee to sell securities to investors residing in their state - these filing fees are typically $50-$250.00 and are paid only if the company is going to raise capital from investors in that state - these fees can also be deducted from offering proceeds.  Go to Top

	Can we use the programs to raise capital for a real estate transaction? Yes. Many real estate professionals and developers use the programs to raise equity capital and then utilize the enhanced balance sheet of the company post-offering to qualify for real estate loans. That is one of the critical advantages of raising equity through the sale of stock - the investment is shown as an asset of the company (cash) rather than a liability as in debt arrangements. The programs are excellent for raising needed equity for re-hab projects, commercial real estate purchases, and real estate development. Go to Top

	Our company tried to get a business loan at a local bank but they turned us down - does this hamper our ability to successfully use these programs? No, individuals who invest in Regulation D offerings do so because they feel the long term possibilities of the company are good and/or a profitable exit strategy will develop - i.e: the company will be acquired by a competitor at a substantial increase in stock value; the company will complete an IPO, or the company will be successful and produce a profitable return for the investor each year. They are much less concerned about the traditional bank criteria for lending. Banks are also notorious for not lending to early stage companies with little operating history - the Regulation D programs are ideal for these situations. Go to Top

	I don't have a good personal credit history - is this a factor in using these programs? No, personal credit history of the principals is not a factor and is not disclosed to investors. Go to Top

	Do I have to personally guarantee the invested capital? No - this is not a loan arrangement. Investors are purchasing an ownership stake in the company - just like you would do if you invested into the stock of Microsoft, Netscape, or Ford Motor. Go to Top

	How much of my company do I need to sell to raise capital? What type of return do investors look for? This depends on several factors - all of which are covered in the Capital X registered users section, however most companies sell between 10-25% of their stock for a first round funding - less if it is a second or third round situation. Returns vary depending on risk. Most companies re-invest company income during the first few years after an offering to assist in the overall growth of the company. Go to Top

	Isn't structuring a securities offering difficult? I don't have much experience in securities. The structure and marketing of a Regulation D offering is not difficult provided you have the necessary support and resources. The Capital X Ventures service provides clients with every resource needed to prepare, file, and market an offering. The step-by-step instructions and the offering support service make the process very efficient and understandable to individuals with little or no experience in securities. Go to Top

	How long does it take to structure the offering memorandum and have the company ready to market its stock to investors? Utilizing the user-friendly design of the Capital X site, the typical individual can complete the offering memorandum work and SEC filings in about 5-8 hours. Go to Top

	How long does it take to raise capital once we have completed the offering memorandum and filed the Form D with the SEC? This depends on how much time is devoted to marketing, the size of the offering, and the quality of the company's concept - with an aggressive marketing program the securities can typically be sold within 120 days. Go to Top