How to Sell SAFTs to Accredited Investors:

 

How to Sell SAFTs to Accredited Investors:

 

(Not legal advice, just my opinion)

 

A Simple Agreement for Future Tokens (“SAFT”) can be used to sell tokens to Accredited Investors. This is a Security Offering and the best approach I am aware of is to follow the Security and Exchange Commission (“SEC”) registration exemption known as Regulation D (“Reg D”) using Rule 506(c). Here are the basics: https://www.sec.gov/fast-answers/answers-rule506htm.html). 

 

 

 

 

There is a long analysis of why a SAFT should be considered a Security Offering, and by selling Tokens in this fashion, it may usurp the potential to list them on a crypto exchange in the future because once they are classified as a Security, only exchanges following the traditional Securities Laws can sell them. I plan on writing a future blog to explain these nuances, but for tonight, the goal is to explain the process of getting some money in the door for your project using a SAFT Agreement. 

 

• Step 1: Write a Whitepaper 

• Step 2: Write an Offering Memorandum

  • https://www.sec.gov/oiea/investor-alerts-bulletins/ib_privateplacements.html

• Step 3: Write a SAFT Agreement 

• Step 4: Verify your investors are Accredited Investors 

• Step 5: Make sure your investors are not on the OFAC list and follow AML/KYC industry best practices

• Step 6: File Form D with the SEC within 15 (business) days of beginning to sell your securities.

 

What is Form D? 

• It allows companies to get an exemption to raise capital without doing a traditional IPO where they sell stock to the public.  

• Form D notifies the SEC of stock promoters, executive officers, and other general information. It covers all of America, so it bypasses the state-laws. 

• It’s free to file.  

• Everything written on Form D is accessible to the public

 

Neglecting to File Form D:

• Failing to register the sale of securities with the SEC can lead to fines, criminal charges, and refunding all investors. 

Information included in Form D: 

• Information about the offering

• The Company’s Name, Address, Executive Officers, Directors, Size of Offering

 

How to File Form D: 

• Get a CIK number and access code through the SEC Website, and get Form ID notarized and submitted. 

• Log into the SEC’s electronic gathering, analysis, and retrieval (“EDGAR”) page: https://www.filermanagement.edgarfiling.sec.gov/Welcome/EDGARFilerMgmtMain.htm

and submit the Form D there. 

• Here’s what information is required: https://sashahodler.com/wp-content/uploads/attachments/formd.pdf

 

 

Helpful Links: 

 

https://medium.com/cryptos-today/icos-and-the-saft-why-what-and-how-9dee58cc0059

https://www.upcounsel.com/form-d