Raise Green Securities FAQs
Have questions about Securities as it relates to Regulation Crowdfunding?
Here are questions we are frequently asked.
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Yes you can! However, each security type would need to be offered as a separate listing on the marketplace with separate Form Cs.
There are many business, legal, and financial reasons you may choose to issue debt (take out a loan from the crowd) or equity (sell some ownership of your company to the crowd). You should consult with your legal counsel and the Raise Green team before deciding!
Debt refers to any time one entity or person borrows money from another with some promise of repayment. In the case of crowdfunding, “issuing debt” means taking out a loan from the crowdfunding investors. Typically a loan contract includes specific agreed repayment terms, such as interest on the borrowed money, the term or tenor (the timeframe over which the loan will be paid back), whether or not the debt is “secured” (meaning there are collateral assets available as a backup in the case of failed repayments), and other rights and obligations of the borrower and lender during the life of the contract. Raise Green has premade securities for term debt for solar and energy efficiency projects.
Equity refers to any time a business sells an ownership share to a person or other entity. Equity can take many forms, such as common stock (also called common shares, which have voting rights for the company’s governance), non-voting shares, preferred shares, and even a special security called a Simple Agreement for Future Equity (SAFE). Often we see crowdfunding issuers selling preferred, non-voting shares, with repayment to their investors via dividends. Equity investors may also receive a return on their investment when their shares are resold (for example if the entire company is bought out by a third party), or repurchased by the issuing company. Returns on equity may be explicitly planned, for example via a predetermined dividend schedule, or may be variable based on the success of the business.
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