Investment & Capital Transactions

Capital transactions sit at the intersection of contract and securities law

Raising or deploying private capital involves both the specific instrument used (a SAFE, a convertible note, or a direct equity subscription) and the broader securities-law framework that governs how any offer or sale of a company's securities may lawfully be made. Missing either layer creates risk.

The firm drafts and negotiates the transactional documents and helps clients understand the general regulatory framework, while directing clients to qualified financial and securities-compliance professionals for individualized investment or tax advice. The firm does not provide investment advice.

The general securities-law framework

Under federal law, offers and sales of securities generally must be registered with the Securities and Exchange Commission or qualify for an exemption from registration. Many privately held companies rely on exemptions available under Regulation D, which permit offerings to accredited investors and, in some cases, a limited number of non-accredited investors, subject to specific conditions.

• Accredited investor status generally turns on income, net worth, or professional qualifications defined by SEC rules, which should be confirmed against current regulations rather than assumed.
• Companies relying on a Regulation D exemption typically file a Form D notice with the SEC after the first sale of securities in the offering.
• Florida imposes its own securities notice-filing requirements for offerings sold to Florida investors, separate from the federal filing.
• General solicitation and advertising rules differ depending on which Regulation D exemption is used.

Choosing an investment instrument

• SAFE (Simple Agreement for Future Equity): a contract granting the right to future equity, typically converting at a subsequent priced round.
• Convertible note: a debt instrument that converts to equity under defined terms, often bearing interest and a maturity date.
• Direct equity subscription: an immediate purchase of shares or membership interests at an agreed valuation.
• Each instrument allocates valuation risk, dilution and downside protection differently between founders and investors.

Where immigration intersects with capital raising

Foreign investors evaluating a private placement sometimes intend the investment to support an E-2 or EB-5 filing. Passive minority investment in someone else's company generally does not satisfy the active, controlling investment standard required for E-2 and EB-5 requires a qualifying investment structure of its own: these should be discussed with immigration counsel before funds are committed.

How the firm supports a capital transaction

1. 1

   Structure

   Identify the appropriate instrument and exemption framework for the offering.

2. 2

   Draft

   Prepare the SAFE, note, subscription agreement, or founder-investor documents.

3. 3

   Negotiate

   Work through terms with the counterparty or counterparty's counsel.

4. 4

   File

   Coordinate any required Form D and Florida notice filings with the company's securities counsel.

5. 5

   Close

   Finalize signatures, capitalization table updates and closing deliverables.