How can small businesses raise capital?
A creative and successful business owner can sell securities from the business to achieve his capital needs. Of course, taking a business public is always an option, but this can be impractical for many small businesses. Going public requires compliance with numerous regulations, not to mention the information that must be provided regularly to the SEC and shareholders. To avoid these provisions, business owners can offer their securities under an exemption to the registration requirements, including intrastate offerings, Regulation D, and selling to accredited investors. Companies must still comply with the anti-fraud rules of the SEC when using any exemption from the registration requirements. How does a business raise capital through an intrastate offering? Businesses that want to sell unregistered stock within a single state can utilize the exemption in Section 3(a)(11) of the Securities Act of 1933. This type of offering is treated as a local matter and regulation is left to the s
