I guess you are basically talking about doing a Private Placement or Regulation D Offering.
While the process is very similar to that of an IPO, private placements under Regulation D of the United States Securities Act are usually exempt from most registration and reporting requirements.
The exemption from these reporting requirements, however, entails, among other items, that you: a) comply with various information and disclosure requirements, both on a state and federal level, b) can’t advertise to market your offering and
c) can’t sell any of your securities to general public.
Under this exemption, people that you are allowed to approach with the idea of participating in your offering either have to qualify as:
i) accredited investors (aka. “The Million Dollar Crowd” with a net worth of at least $1 million),
ii) sophisticated investors (those that are pretty experienced in handling personal finance and investment matters, and
iii) up to 35 of those that don’t have to qualify at all.
I know, the latter pretty much contradicts my statement that you can’t sell any of your securities to the general public; well, you can, but only if you adopt Rule 505 for your offering.
Sounds complex, well it is and it’s certainly no playing ground for the inexperienced. Any violation of federal and state securities laws can entail severe civil and criminal penalties, so you would be well advised to work with a seasoned professional or attorney if you decide to adopt this method of raising capital. There is some good information available on our website at http://www.FastVenturesUSA.com/en/solutions/ppm.html and you can even download a tentative document outline for the required prospectus/private placement memorandum.
Also, since you mentioned that this neighborhood is still emerging, I really can’t imagine that most of your neighbors would qualify as accredited or sophisticated investors, or that they would be able to spare a $1,000 for a community-based investment.
There are other financing options available to you that might be better suited to help you realize your dream. Being located in Miami Dade County ourselves, I know that there are still funds available to rebuild neighborhoods and spur commercial development after Hurricane Wilma, Rita and Katrina. Interestingly enough some areas of Naples still qualify as so-called rural or underdeveloped areas and thus qualify for state-backed financing if you decide to build your business there. Also, have you thought about adopting a not-for-profit structure for your bookstore?
Finally, I respectfully disagreed with fellow poster “Speed”; it’s always a good idea to think everything through before you make your move.
If you are interested in discussing your plans in greater detail, please feel free to contact me and let’s talk.
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