There are ways to do this as an unregistered offering, but that restricts you to friends and family, "accredited investors" (see http://www.sec.gov/answers/accred.htm), and a few others - definitely not strangers on the internet.
There are ways to do this as an unregistered offering, but that restricts you to friends and family, "accredited investors" (see http://www.sec.gov/answers/accred.htm), and a few others - definitely not strangers on the internet.
But on the other side, if the legal work papers for documenting the investment will cost a fortune and has many restrictions, and I won't even be able to do it because I am not in U.S....
Is it possible to treat the shares as virtual product? What about if I work around this and say... yeah these are shares but we will treat it as virtual product, just like the virtual gifts that people buy on facebook and hi5.
But you will take advantage of buying this virtual product/gift, that you will be able to resell it to me after a year with higher price, or you can keep it and get devidends...
And by buying the virtual product, you own percentage in the startup...
What do you think?
You can call the shares whatever you want, but if the SEC deems them securities, they're securities. For an example of this, Prosper (a P2P-lending site) recently got nailed and is facing huge fines and several lawsuits over what they called "loan notes" and the SEC later said needed to be registered as securities. See:
http://fred93blog.blogspot.com/2008/11/prospercom-sec-cease-...
(Please don't take any of what I'm writing as legal advice, you really need to talk to a lawyer. There are ways to go the friends-and-family route that aren't horribly expensive.)
About the SEC, I saw that PayPal started something... they take the money you have in your paypal account, and use it for invesments, and it's NOT covered by SEC. I read that at PayPal.
What do you think?
EDIT: About lawyers, well... believe me, I have no money! I am not raising the money for the sake of raising money, because I think that raising funds is a "serious responsibility", but I am raising it because I am running out of money, and I am owed!