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When raising capital, is it mandatory to file a Form-D with the SEC?

We are wrapping up a $1mm funding round and were advised that we should file a Form-D with the Securities and Exchange Commission (SEC). I did some reading online but cannot tell if we have to file a Form-D or if it's more of a CYA (cover your a$$) move. I've also been reading that you have to file a Form-D with each state your investors live in, which seems crazy to me. Does anybody have experience with this? Any advice or insights would be hugely helpful! Thanks in advance...

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Beau D'Arcy
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Beau D'Arcy Entrepreneur
Engineer, Manager, and now Entrepreneur
After doing some digging and talking to a few folks, it seems like the most concise answer is, "Yes," you must file a Form-D if you sell any type of securities, including convertible-notes and equity. The best source of information, surprisingly, comes straight from the SEC website - www.sec.gov/answers/regd.htm . The size of a raise determines how significant the disclosures, financials, etc. that must be given to each potential-investor so they can make a "smart" decision as to investor or not invest. They reference the laws ("Rules") that dictate the requirements at different thresholds: Rule 504 (up to $1mm), Rule 505 (up to $5mm), Rule 506 (> $5mm). It seems like "accredited investor" is a critical term, too, and if you only sell to accredited investors, you can advertise your offering publicly. Pretty interesting stuff, actually.

I'll keep digging into the individual state laws / filings, but at least this is a start. Please feel free to chime-in if you have experience with this!

Thank you...

[I should disclose that I am an engineer and NOT an attorney - consult a securities attorney before using any advice I share on this thread]
Neil Gordon
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Neil Gordon Advisor
Board Member, Corporate Finance Advisor and Strategy Consultant
If I was "wrapping up a $1mm funding round" I'd be following the advice of counsel. I often serve as Purchaser Representative when an offering involves non-accredited investors. On occasion I get a call from an attorney who is trying to clean up the mess resulting from a funding round that didn't quite comply with the rules. I recommend getting it right the first time.
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