RE: [newtech-1] Forming a Company with International Investors

From: Ron F.
Sent on: Friday, January 11, 2013 9:59 AM

These type of securities law issues in all likelihood should NOT be an obstacle to taking investment funds from a partners’ family overseas, which should likely qualify for either a private placement (if the family meets the requisite sophistication and net worth standards to qualify as “accredited investors”) or Regulation S exemption under the securities laws.

 

One issue is corporate structure—e.g., if you are set up as an LLC, investing could then subject the overseas investors to filing US tax returns.

 

If you plan on raising further capital down the road, the two basic flavors to offer would be (1) seed equity (either common or preferred), presumably at an attractive valuation or (2) convertible debt that automatically converts into the next round of equity at a discount (say 10 or 15%).

 

Ron

 

 

Ron Fleming | Partner
Co-Head Emerging Companies
Pillsbury Winthrop Shaw Pittman LLP
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From: [address removed] [mailto:[address removed]] On Behalf Of Sandra
Sent: Friday, January 11,[masked]:53 AM
To: [address removed]
Subject: RE: [newtech-1] Forming a Company with International Investors

 

There are SEC issues with international investing. I was just approached by a group of Swedish companies to arrange investor and IR meetings in NY and these issues came up.

 

I would suggest chatting with an attorney (he will give you the first hour free) who specializes in these situations.  His name is Morrie Simkin and his number is [masked]-0476. He’s a securities and regs lawyer who started out as an enforcer for the SEC so he knows his way around this subject very, very well.

 

 

 

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Holtzman Communications, LLC
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Great. Marketing. Experience.

 

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From: [address removed] [mailto:[address removed]] On Behalf Of Alan Hyman
Sent: Friday, January 11,[masked]:36 AM
To: [address removed]
Subject: [newtech-1] Forming a Company with International Investors

 

Hello NYTM. 

Happy New year to everyone. I have some questions about forming a company and accepting investment. Here is the good situation to be in: My partners's family overseas wants to invest in our company. What are the different things we could offer them? One idea was to give them a percentage stock of the company. Then as my partner and I make profit we would buy back shares. Also what issues will we find when accepting investment from an overseas investor?  Has anyone been in this situation before? I would love to hear any stories you may have out of your experiences forming companies and accepting investments. Advice?

 

Are there any reliable resources online we could use to research these questions?

 

Thank you. 


Best,

Alan Hyman

Sent via Mac Mail. It is not the best, but it is pretty.

 

 

 





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