Rule 701

Rule 701 is an SEC exemption that allows private companies to issue equity compensation (such as stock options and RSUs) to employees, consultants, and advisors without registering the securities, subject to limits and disclosure requirements above certain thresholds. In startup equity programs, Rule 701 is essential for compliant option grants, and Rule 701 disclosure packages are a common diligence request in later-stage financings and M&A.

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Ryan Roberts Startup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.