What is your process in fundraising and finding investors?

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February 14, 2021

by a searcher from Universidad Carlos III de Madrid in London, UK

we'd like to get the community's feedback on the following idea. We are considering raising a fund, but we need help with the idea of fundraising and finding investors, how you structure your search in finding investors? what's your unit size of investment?

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Reply by a professional
from William Mitchell College of Law in Minneapolis, MN, USA
Good afternoon Zaid. As you consider how you find investors, please keep in mind two legal issues: 1. Raising a fund involves an offering of securities. That means both federal and state securities laws have to be considered. While there are many ways to do it, most avenues prohibit “general solicitation” which means publicly advertising for investors. This is more broad than placing an ad in a newspaper and it covers more than people realize. You can Google the term for a lot of law firm info on it. 2. Be aware of using and paying “finders.” Finders are usually well-connected people who, for a fee, will connect you with investors. Whether they know it or not, a lot of finders are violating federal and state securities laws and acting as an unlicensed broker-dealer. Paying a commission to a finder can lead to problems, despite the fact that this activity happens all the time. Please consult with experienced legal counsel on your raise and this post shouldn’t be considered legal advice to you or anyone (sorry, obligatory disclaimer...)

Good luck on your search and I hope you get great feedback on your question.
commentor profile
Reply by a searcher
from University of Hawaii in Anchorage, AK, USA
Great share. Thanks Todd!!!
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