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Securities and Capital Markets

Varnum helps companies comply with complex sets of SEC and other legal regulations and requirements

Varnum attorneys represent a number of publicly held companies, and we have long-standing relationships with many of our publicly held clients. Our objective is always to develop a close relationship with the management team and boards of directors to enable us to be a trusted advisor on all business and legal matters.

Our representation of publicly held companies includes helping companies comply with the complex set of Securities and Exchange Commission (SEC) and other legal regulations and requirements applicable to public companies. We assist the management and boards of directors of existing and prospective public companies with issues such as:

  • Initial and secondary offerings of equity and debt securities
  • SEC reporting obligations
  • Stock exchange listing requirements
  • Business combinations and M&A transactions
  • Proxy solicitations
  • Shareholder and analyst relations
  • Insider trading policies and compliance
  • Equity compensation plans
  • Executive compensation practices
  • Internal control matters
  • Corporate control and anti-takeover measures
  • Tender offers
  • Sales of securities by affiliates and sales of restricted securities
  • Securities-related litigation
  • Going private and going dark transactions

Raising Capital

Varnum has significant knowledge and experience with helping private companies raise equity and debt capital. For startup companies, raising capital is almost always the most difficult challenge facing the company. After the initial capitalization, accessing additional capital can be critical to the company’s growth.

There are several complex federal and state laws that must be followed when raising capital. These laws are intended to protect investors. In our experience, startup and other private companies often receive poor advice on matters related to raising capital, including from other professional advisors. The risks of non-compliance are significant and can include both substantial monetary damages and even criminal liability.

In addition to complying with applicable securities laws, Varnum works with private companies to ensure that the amount, timing and terms of the capital raised are consistent with the short-term and long-term goals and projections of the company and its owners.


Capital Raising Steps

Varnum is able to assist in all aspects of raising capital, including:

Preparing to raise capital:

  • Confirm corporate structure is the best to structure given goals and projections
  • Review presentation of financial statements
  • Determine whether financials should be reviewed or audited
  • Review financial projections and completeness of assumptions
  • Review organizational documents and determine any necessary corrections
  • Review key contracts and address any loose ends
  • Prepare to respond to detailed, lengthy investor due diligence requests lists

Assessing various potential sources of capital and developing a plan to approach best sources:

  • Banks, financing companies and other lending organizations
  • Friends and family
  • Angel investors
  • Venture capital firms
  • Private equity funds
  • Investors referred by broker-dealers

Determining appropriate types and terms of securities to be offered:

  • Promissory notes
  • Other types of debt and convertible debt
  • Trust preferred securities
  • Preferred securities (including stock, LP interests, or LLC interests)
  • Common securities (including stock, LP interests, or LLC interests)
  • Other types of equity

Determining appropriate federal and state registration exemption(s) given nature of offering and potential investors:

  • Regulation D private placements (including SEC Rule 504, Rule 505, and Rule 506 offerings)
  • Intrastate offerings
  • Section 4(2) private placements
  • Drafting private placement memorandum (PPM) or offering memorandum, including disclosures necessary to comply with registration exemptions and to avoid anti-fraud liability
  • Advising on circumstances in which the company can compensate a third party for investor referrals
  • Acceptance of subscriptions and closing of offering
After Raising Capital

Varnum regularly assists private companies with securities-related issues that arise involving their capital structure, including:

  • Resales of securities by investors
  • Secondary market trading
  • Investor relations
  • Corporate governance
  • Avoiding SEC registration
  • Initial public offerings (IPOs)

“We have worked with Varnum extensively over the last few years on all legal matters associated with our business, both nationally and internationally. And we have found the firm to be excellent in understanding, expertise and responsiveness.”

CEO, national brand

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