Private Securities Offerings
Raising money from investors means selling securities, and federal and state law assume every sale is registered unless the offering fits an exemption. We’ve guided Pacific Northwest companies through private placements for six decades, structuring each raise so the exemption holds and the round closes without a rescission right hanging over the cap table.
Talk to an attorneyFounded
1965
Attorneys
11
AV-rated
Martindale-Hubbell
Office
Bellevue, WA
Founded
1965
Attorneys
11
AV-rated
Martindale-Hubbell
Office
Bellevue, WA
Securities offering attorneys for Bellevue and Seattle companies
Oseran Hahn structures private capital raises so they qualify for an exemption from securities registration and stay that way. We pick the exemption that fits the round, draft the private placement memorandum and subscription documents, set the investor-verification and solicitation rules the exemption requires, and make the federal and state notice filings on time. We also handle what comes after the close: the resale restrictions, Form D amendments, and disclosure obligations that follow restricted securities. Most companies raise more than once, and a clean first offering keeps the next one simple.
Raising private capital legally is mostly about staying inside one securities exemption from the first pitch to the final filing. We choose the exemption that fits the round (Reg D, Reg A, or Reg CF); prepare the private placement memorandum and subscription documents that carry the disclosure; set the accredited-investor verification and general-solicitation rules each exemption demands; make the Form D and state blue-sky filings the offering triggers; and handle the resale restrictions and ongoing obligations that attach to the securities after the money is in.
Choosing an offering exemption: Reg D, Reg A, and Reg CF
Federal law starts from the premise that every offer or sale of a security must be registered with the SEC under Section 5 of the Securities Act of 1933 (15 U.S.C. § 77e), and registration is expensive enough that almost no closely held company does it. The work of a private offering is fitting the raise into an exemption. Most private placements rely on Regulation D, the safe harbor under the statutory private-placement exemption of Securities Act § 4(a)(2) (15 U.S.C. § 77d(a)(2)). Rule 506(b) allows an unlimited raise from accredited investors plus up to 35 sophisticated non-accredited investors, with no general solicitation. Rule 506(c) permits public solicitation but requires the company to verify that every purchaser is accredited.
When a company needs to reach investors who aren’t accredited, the registered alternatives carry their own rules. Regulation Crowdfunding (Securities Act § 4(a)(6)) caps the raise and runs it through a registered funding portal. Regulation A offers a mini-registration in two tiers, with Tier 2 reaching up to $75 million but requiring audited financials and ongoing reports. We map the company’s investor base, timeline, and disclosure tolerance against each exemption before a dollar is raised, because the exemption chosen at the start dictates every rule that follows.
The private placement memorandum and offering documents
An exemption from registration is not an exemption from the antifraud rules. Every private offering remains subject to Rule 10b-5 under the Securities Exchange Act (17 CFR 240.10b-5), which makes a material misstatement or omission in connection with the sale actionable. The private placement memorandum is how a company meets that duty: it describes the business, the terms of the security, the use of proceeds, and the risk factors an investor would want to weigh. A Rule 506(b) offering that includes non-accredited investors must deliver specified disclosure resembling a registration statement; an all-accredited 506(c) raise has more latitude, though the antifraud exposure is identical.
Around the memorandum sits the rest of the offering package: the subscription agreement that binds the investor and collects the representations the exemption depends on, the investor questionnaire that establishes accredited status, and the operating or shareholder agreement the new money will join. We draft these as one set, so the risk factors, the securities terms, and the investor representations line up instead of contradicting each other.
Accredited-investor verification and general solicitation
The line between Rule 506(b) and Rule 506(c) is general solicitation, and it sets the verification burden. Under 506(b), a company cannot advertise the offering or hold it open to the public, but it may accept an investor’s own representation that they qualify as accredited under Rule 501. Under 506(c), the company may market the raise openly, post it online or present it at a demo day, but it must take reasonable steps to verify each investor’s accredited status through tax documents, brokerage statements, or a written confirmation from the investor’s accountant or attorney.
Two doctrines trip up companies that run more than one raise. The integration rules decide when two offerings close enough in time are treated as a single offering, which can break an exemption that each raise would have satisfied alone. And the bad-actor disqualification of Rule 506(d) removes the Regulation D safe harbor entirely if a covered person, an officer, director, or significant shareholder, has certain securities or criminal violations in their past. We check both before the offering launches, because each is far cheaper to plan around than to cure.
Federal and state filings: Form D and blue sky
A Regulation D offering requires a Form D filing with the SEC through EDGAR within fifteen days of the first sale (Rule 503), a short notice naming the issuer, the exemption claimed, and the amount raised. Missing it doesn’t automatically void the exemption, but it can jeopardize the company’s ability to rely on Regulation D later and draws state regulators’ attention.
State securities law applies on top of the federal exemption. The National Securities Markets Improvement Act made Rule 506 securities covered securities that states cannot require to be registered (Securities Act § 18, 15 U.S.C. § 77r), but states keep the right to require a notice filing and collect a fee. In Washington, the offering runs through the Securities Act of Washington (RCW 21.20), and a 506 issuer files a notice with the Department of Financial Institutions and pays the fee, while Regulation A and intrastate offerings face fuller state review. We make the Form D and the Washington blue-sky notice filing and coordinate filings in every other state where an investor resides, so the offering stays clean across all of them.
Resale restrictions and ongoing compliance
Securities sold in a private offering are restricted securities, and the restriction follows them. An investor cannot freely resell them; the shares carry a legend, and a resale generally waits out the holding period and conditions of Rule 144 or finds its own exemption. Founders and early investors are often surprised that the stock they bought is illiquid by law, not just by the absence of a market, and we explain that constraint before the subscription is signed rather than after.
Some exemptions carry obligations that outlast the closing. A Regulation A Tier 2 issuer files ongoing annual and semiannual reports; a Regulation Crowdfunding issuer files an annual report until it can deregister; a Regulation D offering left open requires Form D amendments. The biggest risk of a defective exemption surfaces later: an offering that loses its exemption gives every investor a rescission right under Securities Act § 12(a)(1), the ability to demand their money back, which can land on the company when it can least afford it. We keep the post-closing obligations on calendar so an exemption earned at the raise isn’t lost in the year after it.
An exemption is only as good as the documents and filings behind it, and the problems surface a year later, in a down round, a dispute, or diligence for a sale. Six decades of securities and corporate work means we draft the offering knowing exactly what gets examined when the stakes are highest.
Securities, corporate, and tax in one room.
A private raise touches securities law, the company’s governance documents, and the founders’ tax position at once. The corporate and tax groups sit beside the securities practice, so the offering is structured for the whole picture, not just the exemption.
We draft for the diligence to come.
Every offering we paper gets read again later by an acquirer’s counsel, a later-round investor, or a regulator. We document the exemption, the verification, and the filings so that review confirms the raise was clean rather than uncovering a problem.
The same partner across every round.
The attorney who structures the seed round is the one who handles the Series A, the Form D amendments, and the resale questions two years on. Continuity is how a cap table stays clean as a company raises again and again.
The attorneys behindthe work.
Our business and corporate attorneys handle this work alongside our litigation team, so you have coverage whether your matter stays transactional or becomes something more.
What clientsask us first.
How much can we raise in a private offering?
Under Rule 506, as much as you can place; there is no federal dollar cap on a Regulation D raise from accredited investors. Regulation Crowdfunding and Regulation A impose annual limits. The practical ceiling is usually your investor network, not the rule.
Do we have to be a corporation to raise money this way?
No. LLCs, corporations, and limited partnerships all raise through private offerings; an LLC membership interest and a fund’s limited-partnership interest are securities just as corporate stock is. The exemption analysis is the same; the instrument and the disclosure change with the entity.
Can we advertise the round or post it online?
Only under Rule 506(c), and then only if you verify that every investor is accredited. A Rule 506(b) offering, the more common path, prohibits general solicitation entirely, so a public post or pitch can quietly break the exemption you were relying on.
What is a private placement memorandum, and do we need one?
It’s the disclosure document describing the business, the security, and the risks. An all-accredited 506(c) raise doesn’t strictly require one, but the antifraud rules apply regardless, so most companies use a memorandum to document what investors were told and limit later claims.
Do you handle offerings with investors in other states or countries?
Yes. We make the Washington notice filing and coordinate blue-sky notice filings in every state where an investor resides, and we structure offerings that include foreign investors under Regulation S so the round closes clean across jurisdictions.
When is it time to bring in a securities attorney?
Before you take the first dollar from an investor. Before you post the round online or pitch it at a demo day. Before a friend or family member writes a check. The exemption has to be in place at the first sale, and fixing a defective offering afterward is far harder than structuring it right.
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Oseran Hahn P.S. · 11225 SE 6th St, Suite 100 · Bellevue, WA 98004
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