Fundraising for a US company: the key considerations for a European investment bank.
When assisting an American company with a fundraising round – particularly when mobilizing investors based in the United States – a number of specific regulatory requirements must be anticipated. For a European investment bank, the transatlantic frontier is not just cultural or financial: it is, first and foremost, legal.
In the United States, fundraising is strictly regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Any activity that can be classified as financial intermediation, investor solicitation, or the collection of success fees is, in principle, reserved for actors holding a duly registered Broker-Dealer License. This license, along with examinations such as Series 7 or Series 63, is a genuine regulatory passport. Without this registration, a foreign entity cannot legally solicit American investors, even indirectly.
Therefore, several key areas of attention are essential for a European investment bank:
Determine from the outset whether the fundraising targets regulated US investors or not.
Evaluate the exact nature of the services provided (strategic advice vs. active investor solicitation) in order to remain within the authorized scope.
Rely, if necessary, on an American partner that possesses the required licenses to carry out any placement activity.
Verify potential exemptions (e.g., Rule 15a-6, accredited investors, private placements), which sometimes allow operations within a strict but viable framework.
Anticipate the documentation compliant with SEC standards and the granularity required in disclosures.
In summary, assisting an American company with its fundraising is perfectly feasible from Europe, provided the US regulatory aspect is integrated from the very beginning. This is a prerequisite, but also a key factor for success and credibility with American investors.