This post is a primer on crowdfunding for entrepreneurs and other people who are not securities lawyers.
I’ll start by talking a bit about securities and then about equity and non-equity offerings. Bear with me; we’ll get to crowdfunding.
What is a security? The most common types of securities are stocks, bonds and notes. However, just about any instrument representing a share or interest in a company will be a security.
Securities are regulated by federal and state law. The primary federal laws regulating the registration and sale of securities are the Securities Act of 1933 and the Securities Exchange Act of 1934. The primary state laws regulating securities, known as blue sky laws, are variations of the Uniform Securities Act, a model statue created by the National Conference of Commissioners on Uniform State Laws.
Registration and Exemption
Securities must be registered to be sold, unless there is an exemption for the security or for the sale.