RIA and raising capital for another venture from clients

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Aug 10, 2011 1:02 am

I was wondering if someone might have an answer for me:

I am an RIA in Texas that is registered at the state-level.  I am working on an internet venture that has some nice momentum at the moment and am considering asking some of my clients if they are interested in investing in my internet venture.

The investment in this internet startup would be constructed as a convertible note with a nice equity conversion factor down the road.  

Is it legal for me to do this?  I have a few clients that like my idea and initial model that they want IN.  I want to get them in but was wondering what the implications are for selling securities to clients in your own book.  

Obviously I would disclose this on ADV Form 2 (assuming its legal) and get a corp lawyer to write up all the docs but am I as an RIA allowed to do this with my own client????  Anyone have any experience or thoughts?  Is it as simple as full disclosure on ADV?

Thanks!

v!

Oct 5, 2011 3:06 am

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