Legal Question in Business Law in Pennsylvania

Re: Starting a transaction advisory firm

You really want to retain business and/or securities attorneys to help you with all of these issues.

From your description, it sounds like you want to start a consulting firm that advises private equity firms. Consulting firms don't have nearly the same requirements as the actual underwriters and promoters of investment instruments. That said, the consequences of running afoul of state and federal securities laws can be dire, resulting in severe penalties and astronomical liabilities.

Since you appear to be jumping into a highly competitive field in a highly competitive geographic market, I am assuming you already have some connections there. If you know anyone who works in securities, ask who represents them and see if either that lawyer will represent you or knows of other lawyers who can help you. Most lawyers obtain their clients through these types of referrals.

Again, the distinction between private capital and public exchanges is irrelevant for your purposes at this stage: if you make anything resembling an investment offer to the public, defined as broadly as possible, you could find yourself in serious trouble.

Re: Starting a transaction advisory firm

To put it simply this question really cannot be answered in this fashion. You need to consult securities counsel to discuss all issues. Please identify a qualified securities lawyer in the community where you live. What kind of legal advice you need depends on what you actually intend to do in your venture.

Re: Starting a transaction advisory firm

As a general matter, if your firm intends to underwrite securities offerings or advise on the acquisition of securities as part of merger and acquisition transactions, you will need to obtain broker dealer licenses. NASD membership is another necessity. This is not a complete list, of course, which depends on exactly what type of business you will be doing.

Some firms and individuals act as pure "finders" or "business brokers" in seeking to introduce buyers and sellers of companies in the M&A process but do not advise on the securities transactions or place securities. In some circumstances, such limited "introduction" services may be viewed as outside the scope of securities transactions subject to licensing. Needless to say, this is a "grey" area and introduces risk to the finders as well as their clients. Consult a securities attorney before undertaking this or any other activity with respect to securities transactions -- there are few other industries that are as heavily regulated and require specialized legal expertise.

The above reply is in the nature of general information, is not legal advice, and should not be relied on as such.

Re: Starting a transaction advisory firm

I'll put my two cents in here because I second wholeheartedly what Mr. Kennerly has to say.

Securities, mergers, acquisitions and anything that could even conceivably be construed as an offering to the public lie where angels fear to tread without the advice and counsel of at least one really good lawyer who deals in Securities & Exchange Commission matters. Don't just jump on a public forum like this one and think your answers will tell you all about it; that's the way into some very, very deep weeds.

Get good legal help. If you need a referral, I know a few people who know attorneys who work in this area (I absolutely do NOT work in SEC-related matters) and I'd be happy to come up with a referral for you.

Good luck.

Re: Starting a transaction advisory firm

You asked about starting a consulting or investment business.

This is a very complicated question. The answers will range from relatively simple to extraordinarily difficult depending on a number of factors.

Not only will it depend where your capital is coming from but also how your capital is being used (types of investments). You will need a number of specialists depending on exactly what your business model will look like.

1. Certifications will differ based on the above, both individual and firm. 2. There are tremendous legal and business liabilities involved with both types of venture. 3. An IB generally provides capital to companies in various stages of development. These investments can range from angel or startup capital, mezzanine financing, through IPO and even taking companies private. 4. As above, the type of registration will differe depending on where the capital is coming from and how it is being invested. (e.g. sophisticated or accredited investors, public or private funds).

I can help you as I have strong M&A and IB experience. But there are areas within those fields where you will need specialist advice (which I can help you obtain). You generally have three choices on how to obtain these services. Routinely banks went with large firms that had all the specialists in one place and could answer any question. This of course is a vastly more expensive approach. Another choice is staffing the function in-house, but this has drawbacks because you may not have enough ongoing need to keep your employees fully occupied.

The best option for you may be retaining professionals based on specialty. Hire a point attorney or firm and have that professional engage specialists as needed. Again, this is a service I can provide and have a strong portfolio of colleagues that can provide the necessary service at a very competitive price.

Call me if you would like to speak about this further.

Regards,

Roger