In the public capital markets and in particular markets involving retail investors, SEC regulations and FINRA rules are straight forward when it comes to the definition of a security and what constitutes securities activity. In the private capital markets, not so much.
Companies looking to raise private capital spend a ton on securities attorneys to determine what constitutes a securities transaction. We here at FNEX get questions regarding this daily. This article will cover two common areas of confusion: Issuer’s exemption, and finder arrangements.