Reg D

Definition

An SEC regulation allowing private companies to raise money from unlimited accredited investors without formal SEC registration. It's basically the loophole that makes startup funding possible.

Example Usage

We're raising our Series A under Reg D because it's way cheaper than doing a full IPO registration.

Origin

SEC Regulation D, created in 1982

Fun Fact

Reg D offerings still require a Form D filing with the SEC, but it's much simpler than full registration requirements.

Source: SEC Regulations

Related Terms

Intermediate

liquidation preference

A clause ensuring investors get their money back first when the company sells or dies—like having a reserved lifeboat while founders and employees fight over pool floaties. Can be 1x (reasonable) or 3x (predatory).

🚀 Startup / VC

Intermediate

tender offer

When a company or investor offers to buy shares from existing shareholders at a set price, providing liquidity without a full exit. A release valve for the equity pressure cooker.

🚀 Startup / VC

Advanced

earnout

A deferred payment structure in an acquisition where sellers receive additional money only if the business hits specific milestones post-sale. It's how acquirers say 'we believe your projections!' while quietly not paying for them upfront.

🚀 Startup / VC

Beginner

seed

The first real money a startup receives from external investors, typically ranging from $500K to $2M, given in exchange for equity to entrepreneurs brave (or delusional) enough to think their idea will change the world. This is the stage where your pitch deck matters more than your product, and your co-founder's LinkedIn connections matter more than your revenue. Named 'seed' because most of these investments will never grow into anything, much like actual seeds.

🚀 Startup / VC

Intermediate

dead equity

Equity allocated to former employees, advisors, or early team members who are no longer contributing to the company but still own shares. It's the corporate equivalent of paying rent for a ghost tenant.

🚀 Startup / VC

Beginner

acquihire

When a company buys a failing startup primarily for its talent, with the product being immediately shut down. A face-saving exit that's really just an expensive recruiting strategy with better PR.

🚀 Startup / VC

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