Policy Number 506: Fill & Download for Free

South Dakota showed a different path to getting the rate down:Enact no policies to decrease transmission, downplay the severity, and encourage everyone to go on with their life as normal.Watch as the number of cases skyrocket, and people experience first-hand how bad COVID-19 is.And then watch the cases go down as people take their own precautions without being told what to do.What a great approach: no government mandate, each person can chose whether to wear a mask, people continue to work, etc.It would be a great approach that is, if it weren’t for the carnage it left behind.As of today, North and South Dakota have the highest number of cases per capita. Data from United States Coronavirus: 27,799,946 Cases and 479,772 Deaths - Worldometer (worldometers.info) . That represents over 10% of the population have already been infected. And given the relatively low rate of testing relative to other states, it’s likely even higher.Personally, I prefer the approach that Washington and other states took: tell everyone to wear masks, shutdown some business to protect people, and reduce that carnage. Would have worked even better if more people had listened.But that’s just me...EDIT: This answer surprisingly took off more than I expected, so there is one point I’d like to add. [Quora is weird like that — I fully expected this answer to be largely ignored like most of my answers, while some answers that I thought would be popular get nada.] Since this part is fairly involved, I didn’t bother to discuss it at first, but since it’s been mentioned more than once I want to address it. You can stop reading now if you don’t care about discussing which metrics are more applicable.Several people have commented that positive cases are not the right metric, and that we should focus on deaths. And I agree — to a point. The mortality rate is arguably a better metric then the positive case rate. Deaths aren’t ignored, while positive COVID test rate depends on the amount of testing done and how they are counted.The reason that I didn’t use mortality rate in my answer — beyond the obvious one that it didn’t make my point — is that the CFR has changed significantly throughout the Pandemic, and so using the mortality rate to evaluate the impact of various polices is meaningless without taking into account the time period when the deaths occurred (and to a lesser extent the age groups being infected), relative to when the polices were enacted. In particular, early in the Pandemic the CFR was much much higher than it is now, and each wave after that had a lower CFR.In particular, and this seems to be a common comparison, the vast majority of NY’s deaths came in the first wave, on a relatively small number of cases. In contrast, SD’s deaths came later, when the CFR rate was much lower, on a much larger number of cases. Thus, one can’t just take NY’s mortality rate over the last year, compare that to SD’s mortality rate over the last year, and state that lockdowns don’t work.Here are some numbers showing that.Here is, for example, the number of cases and number of deaths for New York, taken from Tracking the Coronavirus in New York – 24/7 Wall St. . You can clearly see how NY had a big first wave, managed to avoid a second wave due to their lockdown, and then, in term of cases, an even larger third wave. But if you look at the deaths, the vast vast majority of the deaths were from the first wave, even though it had fewer cases. It’s hard to tell from examining it, but it appears that the first wave accounts for about 80% of the deaths but only 20% of the cases. So while overall they appear to have a CFR of over 3%, the CFR in the first wave was over 10%.Here, in contrast, are the same information for SD, taken from Tracking the Coronavirus in South Dakota – 24/7 Wall St. You can see they managed to avoid a wide outbreak for a long time, but when they did have an outbreak, it hit them very hard, infecting over 10% of their population within a 2–3 month window, but with a CFR of 1.3%.Those numbers are unfortunately not adjusted for population, making a direct comparison more difficult. New York’s population is about 22x higher than South Dakota’s, so multiply South Dakota’s numbers by 22 to get approximately the same per capita values. SD’s numbers spiked at about 23 deaths per day in December; 22*23 = 506. You can see that at about the same time, NY’s had about 200 deaths per day, about 2.5x lower than SD’s per capita. [At the same time, you can see that SD had about 1.8x the number of cases per capita, which is lower than the death rate; I assume this is due to lack of testing.]

There is something more to this than threats from businessmen or CMs of states.I mean come on. Poonawala is not exactly a Builder or a Multiplex Owner to get threatening calls. He is the equivalent of Ambani or Adani in terms of strategic importance especially today.Besides he doesnt handle distribution. The policy is central. His job is to manufacture vaccines and hand it to the Central Govt. They handle distribution. Even if he wants to, he cannot deliver vaccines on his own.Its like you blasting a vendor for late delivery on Amazon even though he delivered the Product to Amazon delivery bang on time.Lets say a CM has to complain about lack of vaccines, wouldnt it be heavensend to blast Modi on National Media than threaten Poonawala on phone.And did not Poonawala record the calls? The first call maybe not but he says Many calls. So why not record some calls.And frankly why not tell Modi or Shah so that they can handle the issue. The CBI/ED can handle this easily. Its 507/506(B) and a number of other sections at the very least.Lets see his activitiesHe rented a Huge House in London 4 weeks beforeHe moved his family to LondonHe initially claimed US was not sending raw materials to make vaccines , then when cornered he said its not for covishield but for Covavax which is not even approved.He stated that if he spoke of Kumbh Mela or Election Rallies they would chop off his head when for the last 20 days - every Indian from the Media, Cinema Industry, Businessmen, Popular Twitterati have been screaming from the Rooftops that Kumbh Mela and elections are solely responsible for the Crisis and yet not a pebble has been thrown at them.These Statements and Activities dont like an Impulsive decision taken out of fear.So i believe there is something more than meets the eye in his decision.He is the #1 important person in India now. The entire Central Govt would support him with full help of SC, CBI, Police etc if he just makes a single complaint and every citizen will roast such people on Twitter and maybe even physically.And why not take names?My belief is this could have something to do with the Centre.Otherwise why should he leave the country? Maybe he commited something he could not deliver. Maybe he told some lies about delivery dates. Maybe he had a dispute about profits.Maybe he was used as a Political Pawn and forced to hide secrets about speed of manufacture of vaccine etc.Today he says there will a shortage of vaccines upto JulyHe has a lawsuit against him by AstrazenecaThe Nation is so bad today that the terror of CBI/ED or Criminalization of any businessman is very possible and this could also be a driving reason.I am.pretty sure a man in Poonawalas postion doesnt have to flee to London because somebody threatened him especially at this critical juncture.Tata was threatened by Dayanidhi Maran and he scoffed and treated him with utter contempt and shrugged away and Maran slunk back without lifting a little finger against him.Enough of this comedyAs long as SII can run itself and continue with the Vaccines, he can stay in London or Tokyo or wherever.Yet again someone who wit good intentions decided to do some good and create vaccines for profits for some reason has left the country and if he doesnt return soon- Its bad for the Countrys image.

Quick disclaimer: I will analyze this from a legal perspective (not a strategic or investor's standpoint), but please keep in mind that these kind of questions should be discussed with your lawyer; and if you don't have a lawyer, you should find a good one who specializes in early stage securities law. Don't rely on Quora to help you make these kind of important decisions.Having that out of the way, we can address the generalities of your question:Q: What's the Best Route for Raising Seed from Accredited Investors?A: It depends significantly on your circumstances such as how much money you are raising, whether you intend to or already have raised money within 6-12 months of your offering, whether you will take money from non-accredited investors, and what amount you intend to raise the next financing round, etc., but more likely than not you will rely on Rule 506(b) or 506(c) of Regulation D.Regulation D's safe harbor exemption contains Rule 504 and 506. (Rule 505 was repealed in 2016). Rule 506 is by far the most commonly used exemption for private capital placement. Why? Because it gives the issuer more flexibility in terms of raising an unlimited amount of money from an unlimited pool of investors (subject to certain limitations such as the number of non-accredited investors and the requirement that companies with 2,000 or more shareholders must go IPO).There are two tracks for Rule 506: 506(b) and 506(c).Track #1 - Rule 506(b)No ceiling. There is no limitation on the dollar size of the offering.Limited to 35 non-accredited investors. Sales can be made to a large number* of accredited investors plus up to 35 non-accredited investors. "Accredited investor" means an individual who exceeds either an income or a net worth threshold: an annual income exceeding $200,000 (or over $300,000 jointly with a spouse), or net worth exceeding $1,000,000.Sophistication. Non-accredited investors must either (1) have such knowledge and experience in financial and business matters that they are able to fend for themselves or (2) use a purchaser representative not affiliated with the issuer of the securities being sold.Required PPM disclosure + Audited Balance Sheet: If any purchaser is not an accredited investor, a substantial disclosure document (i.e., a private placement memorandum) must be delivered to non-accredited investors. In addition, if the startup company is raising up to $2M, the company must also deliver, at a minimum, a recent audited balance sheet before the investor purchases the securities. See Rule 502(b). Other financial statements may be required if available and if the company raises more than $2M.No general solicitation or advertising. Rule 506(b) does not permit general solicitation of or general advertising for potential purchasers (as described in Rule 502) EVEN IF such solicitation or advertising is solely to accredited investors. That means the issuer (i.e., your startup) or your sponsors or financial adviser/placement agents are permitted to contact only potential investors with whom one of them has a pre-existing substantive relationship and no publication, broadcasting, or use of other mass media mentioning the offering nor a seminar or meeting with potential purchasers invited by general solicitation or advertising is permitted.Restricted securities. Securities issued pursuant to Rule 506 are restricted securities for SEC purposes. There are also limited resales of unrestricted securities by the startup or its affiliates (i.e., members of startup's control group, generally meaning each person who is a board member, officer, or large shareholder with power to influence company policy).Form D + State blue sky laws. A Rule 506 offering must comply with all applicable securities disclosures (Form D) + state blue sky laws. All states have an exemption dependent upon compliance with Rule 506 and the filing of a Form D securities notification with the SEC + state no later than 15 days after the first sale of securities.*Caveat, above: Companies are required to register (i.e., file IPO) with the SEC once they have either 2,000 shareholders of record or over 500 shareholders who are not accredited investors.Track #2 - Rule 506(c)-Same requirements as Rule 506(b) EXCEPT:Must only sell to accredited investors Sales can ONLY be made to accredited investors (regardless of whether they are sophisticated or not). That means if you have even ONE non-accredited investor, the well is poisoned and you lose the right to rely on the entire exemption. That goes for every single one of your investors. Make sure your due diligence is done correctly (or better yet, hire a professional to do it for you).Advertising and Solicitation Permitted. General solicitation and advertising is permitted under Rule 506 where all purchasers of the securities are accredited investors. That means you can freely and openly list on AngelList, FundersClub, FlashFunders, etc. Legally, you can get a syndication going from someone like Paige Craig. But it's not as easy as it sounds.Heightened Diligence. In addition, unlike 506(b), the level of scrutiny is heightened on your diligence of whether a person is an accredited investor. Instead of You must "take reasonable steps to verify that the purchasers… are accredited investors" and "reasonably believe[] that they [are, in fact, accredited investors]." There is a dual subjective and objective criteria meaning that if you know your retired uncle has a bunch of cool cars but not much else in his estate that could add up to $1 million, then he does not meet the criteria, and cannot invest in your startup, at least under Reg D, Rule 506(c).Do you still need a PPM if you only have accredited investors?No specific disclosures are required for accredited investors, although in order to avoid liability under the anti-fraud provisions of the securities laws, the prudent issuer will make the same disclosures to accredited investors that it makes to unaccredited ones. Conversely, any disclosures that the issuer makes to accredited investors must also be made available to unaccredited investors (if you are under Rule 506(b)). Any information a company provides to investors must be free from false or misleading statements. Similarly, a company should not exclude any information if the omission makes what is provided to investors false or misleading.Advantages and Disadvantages of Reg. DPros:unlimited fundsrelatively simple process and streamlined filing requirements (Form D)general advertising and solicitations is allowed under Rule 506(c)Cons:cannot crowdfund in the truest sense of the term (i.e., attracting a large pool of small investors)only accredited investors allowed, or sophisticated investors under 506(b)no advertising allowed if you have non-accredited investorsIn short, if you want to actively solicit funds on a VC platform such as AngelList, you can only accept money from accredited investors and you can only rely on Rule 506(c) if you want to advertise (there is a small exception under Rule 504 that allows general solicitation or advertising if there is compliance with certain state securities laws, but would not apply if you're raising on the Internet).Can you Rely on Regulation Crowdfunding Now?Edit: Yes. The rules for Regulation Crowdfunding (Title III of the JOBS Act) went into effect in May of 2016.Please bear in mind that Regulation CF is an entirely different statutory scheme than Regulation A, as amended, or Regulation D.You should weigh your options in regards to the costs and ongoing compliance procedures associated with an offer under the new crowdfunding rules. Raising between $500,000 and $1,000,000 can cost you anywhere between $48,000 and $120,000. That's not an insignificant range. That said, if it helps launch your product or get you to a spot where your customers notice you and demand spikes, then the costs might be worth it.Anything Else You Should Know?Yes, two things.First, you should consult with your attorney about whether another exemption or rule may be more advantageous.For example, although raising the typical amount of seed money might not otherwise benefit you, if your company needs a significant seed investment to get started (e.g., $5+ million), you should at least consider Regulation A+ (raise up to $20 million). Compliance costs are rough, though.Rule 1001 may be available if you are a California company or with deep California roots (more than 50% of your voting shares are held by a California resident). You could also raise locally under Rule 147, under a state securities rule, or look for foreign investment under Regulation S. The point is that you should explore all options before deciding on the best route.Second, and no less important than the first, you should consider the strategy of whether it is the right decision for you to even ASK for money in the first place.You should ask a more qualified person whether you should even seek private capital financing.Sramana Mitra's philosophy is:Go to your investors like kings, not beggars.-Sramana Mitra's answer to What is seed funding and how does it work?I like that. Don't be a beggar. Walk into your investor meetings with confidence and understanding about your business that you will make your investors look like fools for not investing in you.