Kim Lisa TaylorSecurities Attorney, Founder, Syndication Attorneys, PLLC · Corporate Securities Attorney, 2x Best-Selling Author, Nationwide Speaker | Private Placement

The Hidden Costs of Raising Capital: Filing Fees Explained

4 Oct 2024 · 1 min

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In this segment, the speaker outlines the composition of fees incurred when raising capital, distinguishing between the law firm's charges and out‑of‑pocket expenses for entity formation and state securities (blue‑sky) filings. For a typical raise of a few million dollars, out‑of‑pocket costs are around $3,000‑$4,000. Raising $10 million can push filing expenses to roughly $8,000 because more states must be covered. Each state’s blue‑sky notice carries a one‑time fee ranging from $150 to $1,200. Even federal offerings must submit state notices to retain jurisdiction, making these fees mandatory for compliance.

Chapters

our fees are going to be a combination of what you actually pay us, plus the additional out-of-pocket expenses associated with forming your entities and filing state securities notices. So typical deal where you're raising a couple million dollars, you can expect out-of-pocket expenses, you know, $3,000, $4,000. But if you're going to go out and raise $10 million, you know, you may have $8,000 in filing fees because you're going to have people coming in from more states. And those blue sky notices we have to file in the states where the investors are located all have fees associated with them. So, can range from $150 to $1,200. And it's one time per state, but you do have to pay those fees in order to file those notices and be compliant with your offering in those states. Even if it's a federal offering, the states still want to have a notice that you're claiming the federal offering and giving them jurisdiction over you in case you don't follow the federal rules.