In this Private Money Minute, Jillian Sidoti, Esq., CCIM answers the question, "What is a Security?". Transcription: "This week on the Private Money Minute we're gonna talk about what a security is, and why do you care, and we're gonna do that right now. A security is basically an investment contract. It's when one party invests money and the other party does all the work. So there is a test to determine whether or not you might be selling a security when asking investors for money. Number one, is the investor investing money? If so, you pass this part of the test. Number two, is there more than one investor and is it in a common enterprise? In other words, are all the investor's money working towards the same particular purpose? Number three, do the investors expect profits? Now profits can come in many different forms. It can come in a form of interest on a note, preferred equity, equity in a company, or perhaps some other kind of profit interest. And number four, it's through the efforts of a promotor. In other words, are you doing all the work on behalf of your investors? So if you answered yes to all of those questions, then you're probably selling a security. And why do you care? You care because there are rules and regulations in place if you're indeed selling a security. And you have to follow those rules and regulations. I'm Jillian Sidoti and this is the Private Money Minute".

In this Private Money Minute, Jillian Sidoti, Esq., CCIM answers the question, "What Are Intrastate Offerings?". Transcription: This week on the Private Money Minute, we're gonna talk about intrastate offerings and what they are, and we're gonna do that right now. An intrastate offerings is a securities offering that is offered in just one state. Now, it doesn't necessarily mean all the business has to be in one state, but you know what does have to be all in that one state, is all the investors. This is afforded under a federal exemption under 3a11, Rule 147A. But, don't, you don't need to know that. What you do need to know is that it's exempt from federal securities laws, but it's not exempt from state securities laws. So, what do you have to do? You have to go and register that security in the one state where you're raising money. Again, all your investors have to be in that state in order to raise money. Now, what states are good for this? Well, I'll tell you right now, it doesn't work in New England states. Those states are too small and people tend to move in and out of New England states. The states you really wanna do an intrastate offering are states like California or Texas. States that are big and have really friendly securities laws. I'm Jillian Sidoti, and this has been the Private Money Minute. Check back weekly for more Private Money Minutes where attorney and CCIM, Jillian Sidoti, demystifies and simplifies the ins and outs of private money, crowdfunding, and securities.

In this Private Money Minute, Jillian Sidoti, Esq., CCIM answers the question, "What is the Difference Between Regulation D and A?". Transcription: "This week on the Private Money Minute, we're gonna talk about the difference between Regulation D and Regulation A. And, we're gonna do that right now. Under Regulation D, we have an exemption from securities laws so long as we make the proper disclosures to our investors and solicit investors in a proper manner, we don't have to get permission from the Securities Exchange Commission to sell securities. Generally speaking, the rule that is used under Regulation D is Rule 506. And under Rule 506, we have B and C. We're gonna talk about the differences between B and C in another video. Under Regulation A, it's also called a mini IPO, or a mini initial public offering. In this situation, you need to go get permission from the Securities Commission prior to selling securities. It's called a qualification statement. Once you get qualified by the Securities Exchange Commission, you can go out and sell securities to the public up to 50 million dollars and from any type of investor. I'm Jillian Sidoti, and this is the Private Money Minute".

In this Private Money Minute, Jillian Sidoti, Esq., CCIM answers the question, "What is the Difference Between 506b and 506c?". Transcription: "This week on The Private Money Minute, we're gonna discuss the difference between Rule 506B and Rule 506C, and we're gonna do that right now. Under Rule 506B of Regulation D of the Securities Act of 1933, we are allowed to raise as much money as we want, from a group of accredited investors, as many as we want, and up to 35 sophisticated investors. The only reason why we're allowed to do this is because you're not supposed to use any general solicitation to get those investors through the door. General solicitation meaning, advertising for investors. However, under Rule 506C under Regulation D of the Securities Act of 1933, we can raise as much money as we want from accredited investors and use general solicitation. But you have to verify that your investors are actually accredited, and for those of you that don't know, an accredited investor is somebody who makes $200,000 a year as an individual, $300,000 a year as a married couple or has a net worth of a million dollars exclusive of their primary residence. I'm Jillian Sidoti, and this has been The Private Money Minute".

In this Private Money Minute, Jillian Sidoti, Esq., CCIM answers the question, "What is the Difference Between Tier 1 and Tier 2 Offerings?". Transcription: "This week on the Private Money Minute, we're gonna discuss the differences between tier 1 and tier 2 of Regulation A, and we're gonna do that right now. Regulation A of the Securities Act of 1933 is also referred to as A Mini IPO. Underneath it, it has two different tiers, tier 1 and tier 2. Under tier 1, a company can raise up to $20 million, does not have to do an audit, can use general solicitation, can take money from any investor in the country. However, in order to take money from any investor in the country, those who register under tier 1 must get permission from every single state in which they wanna raise money. That can be burdensome, both with time and money. Under tier 2, a company can raise up to $50 million, must be do an audit on their financial statements, can use general solicitation and can take money from any investor. So what do I recommend? I recommend that you always go with tier 2. Don't even consider a tier 1. The cost and time burdens with doing a tier 1 with the States is just too much. I'm Jillian Sidoti, and this has been the Private Money Minute".

In this Private Money Minute, Jillian Sidoti, Esq., CCIM answers the question, "What is an Accredited Investor?". Transcription: "This week on the Private Money Minute, we're going to talk about what an accredited investor is, and we're going to do that right now. An accredited investor is someone who makes at least $200,000 a year as an individual, $300,000 a year as a married couple, or has a net worth of $1 million exclusive of their primary residence. Now, in order for someone to be accredited, they don't have to have all of those things. They just have to have one of those things and that would qualify them. A question I often get is, what if a bunch of people get together and create an entity and then invest with that entity? Are they considered accredited? Well, an entity is only considered accredited if you look through, and every single person in that entity is actually accredited or the entity itself has assets of $5 million or more. I'm Jillian Sidoti, and this has been the Private Money Minute".

In this Private Money Minute, Jillian Sidoti, Esq., CCIM answers the question, "What is a Subscription Agreement?". Transcription: "This week on, The Private Money Minute, we're going to discuss what a subscription agreement it is. And we're going to do that, right now. When an investor invests in a company, they should receive a whole bunch of documents, and in that package of documents is a document known as the subscription agreement. The subscription agreement is the bow on the gift of the disclosure. What it does is it binds the investor to the company and the company to the investor. At this point in time, through the subscription agreement, the investor is agreeing to invest, in accordance with the terms and conditions of the other documents provided to them. Usually, these other documents are things like the private placement memorandum, and an operating agreement, or bylaws, or some other material contracts. So in the subscription agreement, an investor says, yes I'm willing to invest, this is how much I'm going to invest, here are all my contacts, I attest that I am indeed an accredited investor, or perhaps a sophisticated investor, or they're not investing more than 10% of their net worth. Most importantly, they're attesting to the fact that they understand the risks associated with investing. I'm Jillian Sidoti, and this has been, The Private Money Minute".

In this Private Money Minute, Jillian Sidoti, Esq., CCIM explains, "The 3 Touch Rule". Transcription: "This week on the Private Money Minute, we're going to talk about the three-touch rule and we're going to do it right now. So what's the three-touch rule? It sounds dirty to me. It's not really a rule. The three-touch rule originated from somewhere and implies that in order to establish a preexisting relationship with a potential investor, you must touch them three times, they don't say where though. However, they do suggest that you should reach out to them, communicate with them, and have three meetings with a potential investor in order to establish a preexisting relationship. However, this isn't really in the law, it's just kind of a good idea. So how does one establish a preexisting relationship? Well, a preexisting relationship implies that you understand the financial ability of wanting to invest. I'm Jillian Sidoti and this has been the Private Money Minute".

In this Private Money Minute, Jillian Sidoti, Esq., CCIM answers the question, "When is a crypto a security?". Transcription: "This week on the Private Money Minute, we're going to talk about when a cryptocurrency is a security, and I don't want to be cryptic, so let's start right now. We've heard a lot lately about cryptocurrencies like Bitcoin and Ethereum and how you can make all kinds of money buying and selling cryptocurrency. However, a lot of companies have recently started using blockchain technology to build their own cryptocurrencies and offer them through what's called an initial coin offering. Recently, the SEC has stepped in and said, "Sometimes, your cryptocurrency is a security." When is it a security? Well, it's when it meets the test. What's the test? The test is, is there an investment of money? Is there common enterprise? Is there more than one investor? Is there an expectation of profits and is it through a promoter? So, if your cryptocurrency isn't truly just a currency but rather a security, then you're going to have to either register that currency or you're going to have to find an exemption from registration. I'm Jillian Sidoti, and this has been the Private Money Minute".