ShmoopTube
Where Monty Python meets your 10th grade teacher.
Search Thousands of Shmoop Videos
Finance: What is Regulation D? 0 Views
Share It!
Description:
Regulation D is a federal regulation that restricts a company issuing securities to only sell to qualified private investors.
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
Transcript
- 00:00
finance a la shmoop what is Regulation D well it's another diet regulation drink [Man holding Regulation D can]
- 00:09
which gets companies selling stocks or bonds out of the small forest they have
- 00:14
to kill to print all the paperwork required by the SEC in a full rollout [Paper printing]
- 00:18
public offering Regulation D is sort of the special situation common in these
- 00:24
letter regulations which in this case simply restricts the company issuing the
Full Transcript
- 00:28
securities to only sell to a qualified private investor set but what is
- 00:33
qualified well it generally means that those private investors are already [Private investor man appears]
- 00:38
wealthy net worth the you know in the millions of dollars may have continuing
- 00:42
income well into the hundreds of thousands or millions of dollars per
- 00:46
year they're educated yes broadly defined and [Man with degree certificate and graduation cap]
- 00:49
it doesn't just mean they've taken a fourteen dollars from of course and most
- 00:52
importantly they will have signed a big boy or a big girl letter which states [A big boy/girl letter]
- 00:56
that if this risky offering goes completely bust well then no tears or
- 01:01
lawsuits in a reg D filing there is usually an allocation for sales beyond
- 01:06
the above accredited private investors and some amount of the stock can be sold
- 01:10
to non-accredited investors and in current reg deal and that number is
- 01:15
limited to thirty five so why would the SEC allow a highly risky private
- 01:20
investment be able to be made to a meaningful number of non-accredited
- 01:24
investors like people who might not be millionaires they might be uneducated [Man emptying jean pockets]
- 01:28
are you not taking the shmoop course or any others or unsophisticated in the
- 01:33
wilds of the financial jungle well because in many early-stage startup [Lion attacks woman in jungle]
- 01:38
companies the founders have a few dozen family members who are all anxious to [Girl biting nails]
- 01:43
find the next Amazon and even though they are a plumber and a carpenter and a
- 01:47
cook they have five grand of savings with which they want to buy a lottery
- 01:51
ticket so the SEC makes accommodation for this investment in reg D and oh by
- 01:56
the way this is actually what happened when Jeff Bezos founded and started [Jeff Bezos with colleagues]
- 02:00
Amazon yeah family members bought in in yeah dreams really do come true
Up Next
GED Social Studies 1.1 Civics and Government
Related Videos
What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...
What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...
How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...