Legal Question in Investment Law in Massachusetts

Family & Friends Investment Form for Start-Up

I am creating a Start-Up Company & a seeking Investors - specifically Friends & Family. Do I need an Investor Form? and where can I find generic form just if they give some for of monetary assistance? Can the investment be in the form of a grant for friends & family?

Asked on 4/29/08, 5:33 am

1 Answer from Attorneys

Edward Wiest Edward R. Wiest, PC

Re: Family & Friends Investment Form for Start-Up

Generically, very small stock offerings in connection with the organization of a business are exempt from state and Federal securities regulation as to the quality and form of disclosure to investors. I would be reluctant, however, to make even a "family, friends and/or angels" offering of stock in a venture which one hopes to grow to the point of seeking external equity financing without the assistance of counsel to make sure even the first round of equity is properly "papered" so that subsequent rounds do not have to reinvent wheels. If you would like to discuss the details of your new company and its financing plan in detail, I could offer more concrete suggestions.

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Answered on 4/29/08, 10:26 am

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