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Before you even think about investing in any pre-IPO opportunity, be sure to do your homework. At a minimum, you'll want to know:
- Details About the Offering – Is the securities offering subject to an exemption? Remember, if it's neither registered nor exempt, it's illegal. Check with your state securities regulator to find out whether they have any information about the company, the offering, and the people promoting the deal. You can also check with the SEC's Public Reference Room to see whether the company has filed an offering circular under Regulation A or a Form D under Regulation D. If you ultimately decide to invest, find out whether your stock will be restricted in any way. And be sure to ask how, if at all, you can liquidate your investment if the company does not go public.
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