Got an email from a reader recently asking me why I don’t write more about the funds we run.
Believe me, I’d love to!
The problem is that I don’t want to run afoul of securities regulations, which prevent the open advertising / marketing of unregistered securities.
The reasoning behind these regulations is sound: The government has an interest in preventing hucksters from setting up BS investment vehicles and scamming unsophisticated investors into parting with their capital. So, if you want to market to the public, you need to be registered with the Securities and Exchange Commission, which is a very expensive proposition.
However, there is an obvious need among entrepreneurs for cash from investors. After all, there are plenty of investment opportunities which:
- Require more money than can normally be mustered by an individual or family;
- Are too small to interest large funds / public companies which can advertise publicly;
- Are too complicated / risky for bank debt to fund; and
- Which are still sufficiently interesting to be worth doing
Responding to this need for private equity, the government has carved out a workable loophole: Entrepreneurs can raise money for these kinds of opportunities from high net worth investors, so long as they don’t solicit publicly (and so long as they abide by a whole bunch of other requirements). Basically, the fundraising needs to be done via personal contact / referrals / introductions.
Because I don’t want to violate the law, I don’t write about my funds directly. It’s kind of a bummer, because this blog would be, in some ways, a pretty great fund-raising platform. And also because, as you may have guessed, many of the most interesting things I’m working on right now relate to our funds, meaning that I can’t share as much as I’d like to you with!
The required legalese: This post is NOT, and should not be interpreted as, a solicitation for investment or for the sale of any securities. Also, I’m not a lawyer, so this post should not be considered legal advice.