How to start a company that raises capital for investments.

[Austin R.]

I was wondering if I could get some advice on how I should go about starting a company that raises capital from investors to buy properties. My idea was to somehow raise the money for a complete purchase or a downpayment then when I had equity built up, enough money saved from cash flow, or I sell the property I could repay my investors and move onto another property. I would really appreciate any help you can provide with business models, financing with debt or equity, and anything else I'm most likely forgetting. Thanks for the help.

[Dion DePaoli]

It is more likely not what you think. Under the Securities Act of 1933, any offer to sell securities (equity in a company falls into this) must either be registered with the SEC or meet an exemption. A common way is through an IPO, which registers a company and sells its equity to the public in the open market. A private way to raise money is through a Regulation D, which provides exceptions to registration as a security and sell securities to private investors.

There is a mile of details here but I recommend you start by looking up some regulation D threads here on BP. From there you can come back and clarify your desires and get answers.