Procuring Investment through Equity (among others, subject to SEC, IRS and state regulation)
A business may determine that outside investment is necessary or appropriate to facilitate growth or reduce debt. There may be third-parties who are interested in acquiring equity as well. However, businesses must be careful in selling equity to outsiders as this activity is regulated by both federal and state laws. Correspondence concerning the sale can be tantamount to solicitation which is regulated. Both those interested in buying in and the company itself must be vigilant about making the proper disclosures to avoid potential pitfalls that may easily arise without diligence.