Properly structured investments and financings are important preventive business law matters to avoid securities law liabilities for the business and its owners. Small to mid-size businesses share a common need for capital to finance growth, working capital and projects. Due to commercial lending restrictions, many small to mid-size businesses seek private equity and debt financing through private placements and other transactions exempt from federal and state securities law registration. Several private financing registration exemptions exist. One of the most popular, due to its preemption of state securities registration requirements, is Rule 506 of Regulation D. Many mistakenly believe that sales to less than 35 persons are exempt from securities registration requirements. This misconception fails to recognize the additional requirements applicable to “private placement” registration exemptions. If a financing fails to comply with the securities laws, one remedy available to investors is “rescission” with interest. This remedy amounts to the sale by the business and its owners of a personally guaranteed “put” permitting the investors to demand a return of their money with interest if the business later fails for any reason.