The process for preparing and completing a Regulation D Offering is fairly straightforward. This section will detail the necessary steps for the preparation and completion of a Regulation D Offering along with how our services assist in this process. Remember, your company will still be privately held at the end of this process - you will not be a fully reporting public company.
Step One: Corporate Pre-Offering Preparation: Many early stage or new companies have corporate structures that incorporate a minimum amount of available share capital. Many companies opt for 1000-2500 total shares to keep their corporate structure simple. This type of structure is not the preferred stock structure for a Regulation D offering or for raising capital in general. This is also the time to properly set the share price and make sure that the principals of the company have the proper amount of shares issued to them to assure they are retaining the amount of corporate ownership they want.
Capital X assists companies in restructuring their corporate share structure in preparation for completing a Regulation D Offering. This includes analysis and recommendations on share structure specific to the clients transaction. We also walk customers through each of the important "decision items" relevant to a Regulation D Offering.
Step Two: Private Placement Offering Memorandum Preparation: When selling your company's stock you will use an offering disclosure document to inform investors about the pertinent details about the company and the stock offering. This document is the disclosure document, or as popularly known the "offering memorandum". While the 504 program has no prescribed disclosure requirements, it is always recommended that you utilize an offering memorandum to assure proper disclosure of all pertinent corporate details. This disclosure document also protects the company and company principals because it informs investors of all the needed disclosure items before they invest.
Some typical disclosures include information about: the company's business, company management, market for the company's product or services, use of invested proceeds, stock offering details (share restrictions, voting rights, etc.), details about shares held by management, details about risks investors may face (lack of operating history, product development risks, reliance on a single distributor, etc), recent significant transactions, and other disclosures related to the company's overall condition.
The company's offering memorandum will include a Subscription Agreement which is the "stock sales contract" between the investor and the company. This Subscription Agreement comes included with an Investor Suitability Questionnaire which helps the company determine an investors suitability for investing in the offering.
Capital X Ventures provides downloads of offering memorandum templates for the 504, 506, and SCOR programs. Our memorandum templates were designed by a securities attorney and come with all areas needing customization and completion in red type for easy use. We also devote an entire section of the website to completing the memorandum. The Memorandum Preparation Assistance section will guide you page-by-page through completing the offering memorandum.
Step Three: Filing the Federal Form D Compliance Document: The Form D Compliance document is the only filing information that is required by the Securities and Exchange Commission in Washington, DC. This 8 page document details information about the offering, the company, use of proceeds, and the principals of the company. This is an "informational only" document and is not subject to a review or approval by the SEC.
Capital X Ventures provides downloads of the Form D document along with support assistance for the completion of the filing
We also provide you with assistance in developing an effective marketing program to solicit individual investors directly including network marketing, customer base marketing, angel investor forums, and advertising.
Step Five: On-going Offering Compliance Support: When selling your company's stock to investors, there are certain States that require information about the offering before you can sell to investors in that State. This information is presented to these States in the form of informational filings, most similar to the Form D, and are commonly called "Blue Sky" filings.
Capital X Ventures provides contact information to every State securities regulator for efficient Blue Sky compliance. We also provide assistance in completing any required Blue Sky filings.
