by Joseph W. Bartlett, Of Counsel, Sullivan & Worcester LLP amd Founder of VCExperts.com, 11/4/2009
The early rounds of financing entail the issuance of securities in "private placements," transactions exempt from registration under the Securities Act of 1933 in accordance with one or more statutory exemptions, as discussed in "Reg. D and Other Exemptions from Registration". Most source materials suggest that the use of private placement memoranda is essential in private placements.
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