According to federal law, you are restricted from reselling your securities in the first 12 months post-closing of the campaign, with a few exceptions:
After 12 months. The selling or transfer is allowed by U.S. federal law, but may still be subject to state or foreign laws. Always consult an attorney before transferring private-company securities.
No market. In most instances, the startup you’ve invested in is a private company, meaning they are not traded on a public market and cannot be easily sold. It is not guaranteed that a market–and therefore buyer–will become available, even after the initial 12-month period.
What qualifies as transfer of securities? Transferring means selling, gifting, or pledging — promising, using as collateral, selling the rights to but delivering at a later date, etc. In other words any way you could try to give away the economic rights without delivering it to someone.
Risk note: It is important that you only invest with the expectation of holding your investment for an indefinite period of time and with the real risk of a total loss of your investment. Only invest an amount you can afford to lose without changing your lifestyle.
Reg A offerings securities are federally unrestricted and can be sold immediately after purchase. However, these securities may be difficult to sell, and wide-ranging price fluctuations are common. There may be state law that affects the merchantability of the securities. Investing in these securities tend to be longer term investments.
Securities purchased through Reg D are considered "restricted securities.”
“Restricted securities” are previously-issued securities held by security holders that are not freely tradable. Securities Act Rule 144(a)(3) identifies what offerings produce restricted securities. After such a transaction, the security holders can only resell the securities into the market by using an effective registration statement under the Securities Act or a valid exemption from registration for the resale, such as Rule 144.
Rule 144 is a "safe harbor" under Section 4(a)(1) providing objective standards that a security holder can rely on to meet the requirements of that exemption. Rule 144 permits the resale of restricted securities if a number of conditions are met, including holding the securities for six months or one year, depending on whether the issuer has been filing reports under the Exchange Act. Rule 144 may limit the amount of securities that can be sold at one time and may restrict the manner of sale, depending on whether the security holder is an affiliate. An affiliate of a company is a person that, directly, or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the company.
How can an investor resell non-restricted securities?
An investor that is not affiliated with the issuer and wishes to sell securities that are not restricted must either register the transaction or have an exemption for the transaction. An exemption commonly relied upon for the resale of the securities is Section 4(a)(1) of the Securities Act which is available to any person other than an issuer, underwriter or dealer. Please be aware that several exemptions, including the exemptions under Regulation D, are only available for offers and sales by an issuer of securities to initial purchasers and are not available to any affiliate of the issuer or to any person for resales of the securities.
Securities acquired under Reg S are also considered ‘restricted securities’ (see above) and are restricted from being resold in the United States during a "compliance period" which may be up to one year from their issuance.
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