In order to raise capital properly it is crucial that you have a pre-set transaction structure. What is transaction structure?How much of the company are you selling for the requested capital?
How are you raising capital - equity or debt?
If equity - what is being sold - stock, units, preferred or common?
What is the share structure of the company?
Do I as an investor face the risk of dilution in the future?
What is the available share capital of the company?
What is the minimum amount of capital the company needs to move forward?
In debt transactions - what is the annual rate of return, maturity date, and note amount?
What is the minimum any one investor can invest?
In a Regulation D Offering the company dictates the terms and conditions of the investment to the prospective investors. This is important because you want to provide to investors a clear, concise investment proposal with zero ambiguity. It is not the investors job to set up your transaction properly for investment. If you do not have in place proper transaction structure investors will see your company as unsophisticated and they will probably not invest.
