Knowledge
Glossary of private capital markets terms
A reference for issuers, lawyers and auditors working through an exempt offering. Every definition is written for the way the term is actually used in a live raise.
Last updated · Reviewed by the KoreInside editorial team
A
- Accredited investor
- An investor who meets SEC income, net-worth or professional-credential thresholds and is therefore eligible to participate in offerings limited to accredited participants, such as most Regulation D placements.
- AML screening
- Anti-money-laundering checks run against an investor before funds are accepted, including sanctions and watch-list screening, retained as evidence on the investor record.
B
- Blue sky laws
- State-level securities laws. Some exemptions, notably Regulation A+ Tier 2 and Regulation D, pre-empt state registration, which materially reduces the filing burden across states.
C
- Cap table
- The authoritative record of who owns what in a company — shares, options, warrants, convertible instruments and the ownership percentages that result.
D
- DealRoom
- A controlled workspace where diligence materials, disclosures and offering documents are shared with investors, advisors and partners, with access and activity tracked.
E
- Escrow
- A regulated third-party account that holds investor funds until the closing conditions of an offering are met, after which funds are released to the issuer or returned to investors.
F
- Form C
- The disclosure form filed with the SEC to launch a Regulation CF offering, including company, offering and financial information.
- Form 1-A
- The offering circular filed with the SEC for a Regulation A+ offering. The offering may not be sold until the SEC qualifies the filing.
- Form D
- The notice filed with the SEC after the first sale in a Regulation D offering.
G
- General solicitation
- Publicly advertising an offering. It is permitted in Regulation CF, Regulation A+ and Regulation D 506(c), but not in 506(b).
I
- Issuer
- The company offering and selling its own securities to investors.
J
- JOBS Act
- The 2012 Jumpstart Our Business Startups Act, which created and expanded the exemptions — RegCF and RegA+ in particular — that make online private capital raising possible.
K
- KYC
- Know Your Customer: verifying an investor's identity before accepting a subscription, and keeping the verification evidence on file.
M
- Minute book
- The corporate record of resolutions, consents, board and shareholder actions. A complete minute book is the first thing diligence and audits examine.
R
- Regulation A+
- An exemption allowing a qualified public offering to both accredited and non-accredited investors, with higher limits than RegCF and ongoing reporting obligations.
- Regulation CF
- Regulation Crowdfunding: an exemption allowing a company to raise from the general public up to an annual cap, conducted through a registered funding portal or broker-dealer.
- Regulation D
- The private-placement exemption, most commonly used via Rule 506(b) or 506(c). No SEC qualification is required, and the offering is generally limited to accredited investors.
- Regulation S
- The exemption for offers and sales made outside the United States, frequently paired with a domestic exemption to include non-U.S. investors in the same round.
S
- Secondary trading
- Investor-to-investor transfer of securities after the initial offering, subject to holding periods, transfer restrictions and the issuer's approval process.
- Subscription agreement
- The contract by which an investor commits to purchase securities, setting out the amount, terms, representations and closing conditions.
T
- Transfer agent
- The registered entity that maintains the official record of security holders and processes issuances, transfers and corporate actions.