Rule 701 U.S. SEC federal security exemption compliance
What is Rule 701?
Rule 701 is one of the federal exemptions from registration requirements. It covers equity awards to individuals offering services to the company, like employees. Captable.io helps you track your equity awards with Rule 701 exemption, and help you stay exempt with an automatic assessment.
What are additional disclosures?
If you are over the threshold, you need to provide additional disclosures to all investors. Materials include risk factors, GAAP financial statements, etc. If they’re not provided, Rule 701 exemption is lost for the entire offering.
The risks of getting it wrong and violating the Securities Act of 1933 are high. See this SEC enforcement action. Review Captable.io’s warnings and consult details with your lawyer.