b'How to Legally Raise Private Moneyonce, or will they get it back over time? If you can answer all of these questions, your securities attorney will be able to help you figure out which securities exemption is appropriate for your offering. Even if you dont know all the answers now, your securities attorney can explain the available options, so you can make the appropri-ate choices for your proposed securities offering. Hint: If you cant explain how you will provide a return on investment and a return of capital to your investors, you probably wont be successful at raising money. COMMONLY USED EXEMPTIONSAs discussed in the previous chapter, the offer and sale of securities must be registered (per Section 5 of the Securities Act of 1933) 4 unless exempt. Following an applicable exemption only allows an issuer to avoid having to pre-register its offering with a securities agency (such as the SEC and/or state securities agencies). An exemption from registration does not alleviate an issuer of its obligations under the anti-fraud, civil liability, or other provisions of securities laws, or its obligation to avoid misleading statements in its promotional materials. Under the federal rules, the states can and have imposed restrictions on paying commissions to any unlicensed securities brokers, which has had a chilling effect on paying finders fees to unlicensed persons who refer investors to a securities offering. Securities sold under Regulation D may generally not be re-sold within one year of purchase, as they are consid-ered restricted securities.Most federal exemptions require the issuer to file a notice and pay a fee with the state securities agencies where investors claim residency, within 15 days of when the issuer makes its first sale in that state. The timing of the notice is usually triggered at the point an investors funds become irrevocably contractually committed to the offering. Regulation D provides two federal exemptions from registration: Rules 504 and 506. 5 The most widely used federal exemption is Regulation D, Rule 506, because it pre-empts (overrides) state securities lawsmean-ing you only have to follow one set of rules in order to sell securities in 4 See 15 U.S.C. 77a et seq., as amended. 5There was previously a Rule 505, but it was repealed as of May 22, 2017. 48'