How to Raise Money in Utah

1
How to Raise Money in Utah

• Wayne Brown Institute
• Mark Carman
• Stoel Rives LLP
• [phone]
• May 17, 2006

2
Roadmap

• Forming your company
• Raising money
• Federal securities laws
• Five common mistakes when raising money

3
Forming Your Company

• Business plan
• Choice / location of entity
• Taxes
• IP protection

4
Raising Money
5
Common Stages of Financing

• Founders
• Angel Investors
• Venture Capitalists
• Exit IPO / Buyout

6
Founders

• What do founders get?
• Dead weight founders Vesting and buy-sell
  agreements

7
Other Investors Many Flavors

• Amount needed
• Stage of business
• Business risk / potential
• Investor involvement

8
Federal Securities Laws
9
Basic Structure

• Selling a security
• Broad rule Registration
• Consequences of violation
• Costs of registration

10
Exemptions

• Intrastate offering exemption
• Private offering exemption
• Accredited investor exemption

11
Five Common Mistakes

• Paying commissions to unlicensed brokers
• Making inadequate disclosures and using
  inadequate documentation
• Selling securities to unaccredited investors
• Involving competent advisors too late in the
  process
• Lacking focus in business plans and presentations