Washington State Department of Financial Institutions

Small Business Assistance

On this page:

Introduction

A core mission of the Securities Division of the Department of Financial Institutions is to promote small business capital formation. One way small businesses can raise capital is by selling stock or other securities in their companies.

In order to assist small businesses considering raising capital through a securities offering, the Division has established a Small Business Section. This section is staffed with attorneys and accountants that are experts on the issues surrounding small business capital formation. As discussed below, this staff is available to answer your questions by telephone, e-mail or by meeting in our office.

Several special programs have also been created to assist small businesses desiring to conduct a securities offering. These programs provide special guidance for designing an offering, drafting a disclosure document, and offering in multiple states.

In addition,  the Division has created several informational brochures and packets of information regarding securities offerings. Links to these publications appear below and the packets may be requested by e-mail or telephone.

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Consultations

Our staff is available for consultations over the telephone or by e-mail. Businesses considering an offering of securities may also schedule a pre-filing conference to discuss the options available to them. The Division encourages these conferences as a way to resolve as many issues as possible prior to filing. Call 360-902-8760 and ask for the Small Business Section or an e-mail Bill Beatty to get the answers to your questions or arrange a meeting.

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Programs

Testing the Waters - This program allows a company to solicit indications of interest from potential investors before going through the expense of registering an offering. Participation in this program allows a company to solicit indications of interest only. The company is not allowed to solicit or accept any money until it registers an offering with the Division.

Small Company Offering Registration (SCOR) - This program couples a user-friendly question and answer offering circular format with substantial assistance from the Division. It is designed to eliminate or substantially reduce the preparation costs for the small company trying to raise capital.

Coordinated Review-Equity (CR-Equity) is available to issuers seeking to sell equity securities in multiple states. It provides a uniform state registration procedure designed to coordinate the blue-sky registration process in all of the states in which the issuer seeks to sell. In addition to creating uniformity in the review, the program is designed to expedite the registration process, saving the issuer time and money. Of the 42 state securities agencies that register these types of offerings, 40 are currently participating. CR-Equity is designed to target stock offerings on the NASDAQ Small Cap, over-the-counter, and other small exchanges. The size of these offerings range from $5 million to $20 million dollars.

Coordinated Review-SCOR-WEST (CR-SCOR-West) - Several Western states participate in this coordinated review program designed to lessen the compliance burdens of small companies who file in more that one state. Under this program, the issuer deals with one lead state which will coordinate the comments from all participating states regarding the offering.  Other regional review programs for SCOR offerings are also available.

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Publications

The Division offers a variety of small business publications:

Small Business Offering Options Decision Tree - This interactive decision tree is intended to help you evaluate whether your business may raise money by selling securities in a strictly private offering and if so, explore some private offering exemptions that may apply, or if it will be necessary for your company to register the offering.

Note: If you have a popup blocker installed, you may need to turn it off to open the decision tree.

Raising Capital: Raising Small Business Capital Through a Securities Offering - This booklet is designed to help small businesses and their attorneys and accountants understand the role of securities regulation, types of securities, and the steps and considerations for conducting a securities offering.

Offering Options: Options for Raising Capital Through a Securities Offering in Washington - Offers an overview of the various registration and exemption provisions available for conducting a securities offering in the State of Washington.

SCOR Registration: Raising Small Business Capital Through a Small Company Offering Registration (SCOR) - Provides an overview of an optional registration provision for small businesses seeking to raise capital in a securities offering.

Role of Disclosure: The Role of Disclosure in a Securities Offering - Explains the type of information that must be disclosed to investors in a securities offering.

Testing the Waters - Details the Testing the Waters/Solicitation of Interest process for small businesses considering conducting a securities offering that desire to gather feedback from prospective investors before actually registering and conducting an offering.

Coordinated Review-Equity (CR-Equity) - Discusses an optional coordinated state review program for offerings being registered with the SEC and multiple states.

Coordinated Review-SCOR (CR-SCOR) - Discusses and optional coordinated state review program for offerings being registered with multiple states and exempt from registering with the SEC pursuant to Rule 504 of Regulation D or Regulation A.

Small Business Frequently Asked Questions - Answers to frequently asked questions by small businesses considering conducting a securities offering in Washington.

NASAA Statements of Policy - Links to policy statements applied to offerings of equity securities.

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Information Packets

Several mailing packets are available upon request.  If you would like any of the information packets listed below mailed to you, please contact Cheryl Pearson or call her at 360-902-8762 and she will send you the packet(s).

Small Business Information - Contains all of the Small Business Publications listed above as well as related rules and frequently asked questions.

Testing the Waters: Solicitation of Interest - Contains procedures for Testing the Waters and the necessary forms.

Small Company Offering Registration (SCOR) - Packet contains the SCOR brochure, SCOR Issuer's Manual, Form SCOR (Form U-7), related rules and other documents necessary for registering a SCOR offering in the State of Washington. These forms are also provided on diskette in Microsoft Word format.

NASAA Statements of Policy - Contains the policies applied to offerings of equity securities.

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Other Sites

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