What You Need to Know Before Taking on Investors

  • ---Shares

When taking on investors, business owners need to abide by federal and state securities laws, which have been created to protect investors. According to business attorney Nina Kaufman, two of the most critical elements needed are:

1. Verification of wealth: Investors legally need to be "sophisticated," meaning they earn $200,000 or more per year or have $1 million or more in assets, Kaufman says.

2. Legal disclosure of risks: You'll need to have something called a private placement memo, which outlines the risks an investor accepts in case your business does not succeed and that person loses his or her investment.
 

Find the Right Franchise for You

Complete our short quiz to pinpoint your perfect franchise match.
Find Your Franchise
OK

This website uses cookies to allow us to see how our website and related online services are being used. By continuing to use this website, you consent to our cookie collection. More information about how we collect cookies is found here.