ChApter 4 | POTENTIAL SOURCES OF MONEY TO START OR ExPAND YOUR SMALL BUSINESS | 75
Fortunately, however, smaller corpo-
rations usually qualify for state and
federal securities laws exemptions. For
example, SEC rules permit the private
sale of securities without registration if
all of the share holders reside in one state
and all of the sales are made in the state.
This is called the “intrastate offering”
exemption. Another federal exemption
allows a “private offering” of shares
without registration. A private offering
can be a sale, without advertising, to a
limited number of people (35 or fewer
is often used as a yardstick even though
the federal statute does not mention a
number). Another way to qualify for a
private offering exemption is to only
sell, without advertising, to persons who,
because of their net worth or income
earning capacity, can reasonably be
expected to take care of themselves —that
is, they can adequately assess the risk and
bear the cost of investing in the business,
without needing the protections affordedby the registration procedures of the
securities laws. Most states have enacted
their own versions of these popular federal
exemptions.
For more information about SEC small
business exemptions, visit the SEC website
at http://www.sec.gov. The Question and Answer
Portion of the Small Business Information
section contains a great deal of useful infor-
mation, in easy-to-understand language.Conclusion .............................................................................................................................................
There you have it—the primary and some
secondary sources of finding money to start
your business. If you really believe in your
idea, complete the business plan outlined
in the rest of this book. Then contact all
the sources listed above. If you have a
good plan and refuse to take “No” for an
answer, you will find the money you need.
The Chinese say the longest journey beginswith a single step. Let’s get started. (^) ●