Faison Law Group

Legal Resources

M. James Faison, attorney at Faison Law Group, discusses securities regulation. Navigating securities regulation is a crucial aspect of early-stage investing. Both federal and state bodies, such as the Securities and Exchange Commission (SEC) and state Offices of the Attorney General, regulate securities.

Registering securities can be complex, costly, and time-consuming, but exemptions exist. One determining factor for these exemptions is whether investors are classified as “accredited.” In early-stage investing, especially during the friends and family rounds, the focus is usually on these types of individual investors.

M. James Faison, attorney at the Faison Law Group, discusses convertible securities. Convertible securities play a crucial role in early-stage startups through flexible financing options.

These securities typically fall into three primary categories: Convertible Notes, KISS (Keep It Simple Securities), and SAFE (Simple Agreement for Future Equity). While they share many similarities and can often be customized to look nearly identical, a key distinguishing factor is when they convert into company ownership.

M. James Faison, attorney at the Faison Law Group, discusses important topics for young and growing companies navigating the venture capital process. These topics include key terms in venture capital and the importance of selecting the right entity type and state of incorporation.

Starting with venture capital terms, two main funding rounds exist: price (equity) rounds and non-price (non-equity) rounds. In price or equity rounds, the company is assigned a value, and shares or stocks are issued accordingly. The process requires creating different classes of stocks and seed rounds. This process is generally more costly and time-consuming, making it more suitable for later stages in a company’s growth.

James Faison of Faison Law Group continues his conversation about raising money from unaccredited investors. There are certain exemptions you can use and here he will discuss 506b specifically.