You just raised $1 million in your crowdfunding offering under Title III/Regulation CF. That’s the good news. The bad news? You now have over a thousand shareholders on your cap table, making it unwieldy, an administrative nightmare and likely to impede future funding. It means a huge challenge seeking consents for such things as director
“Demo Days are Here Again”: Part Two of Exempt Offering Amendments Deeper Dive
At the 1932 Democratic National Convention, the live band at one point burst into 
“Happy Days are Here Again”, FDR’s favorite, drawing raucous cheers from convention delegates. It went on to become the Democratic Party’s unofficial theme song for years to come. The song is also associated with the repeal of Prohibition shortly after FDR’s
Exempt Offering Amendments Deeper Dive, Part One: Higher Offering Caps
Last month, the Securities and Exchange Commission passed sweeping reforms of 
the rules governing exempt offerings (the “2020 Reforms”) to make it easier for issuers to move from one exemption to another, to bring clarity and consistency to the rules governing offering communications, to increase offering and investment limits and to harmonize certain disclosure requirements
Significant Exempt Offering Rule Reforms Approved by SEC to Facilitate Capital Formation
On November 2, 2020, the SEC adopted significant rule amendments to simplify, 
harmonize and improve the exempt offering framework to facilitate capital formation and investment opportunities in startups and emerging companies. The rule amendments were initially proposed in March 2020, and first conceived in a concept release in June 2019. The reforms simplify the integration
“Kik” in the Butt: Court Decision Against Initial Coin Offering Could be Opportunity for Others
On October 21, 2020, the United States District Court for the Southern District of New 
York entered a final judgment on consent against Kik Interactive Inc. to resolve the Securities and Exchange Commission’s charges that Kik’s unregistered public sale of digital tokens in 2017 violated the federal securities laws. The final judgment requires Kik to
SEC Proposes Much Needed Finder Exemption, and Paul Anka Must Be Singing
Finders play a vital role in introducing startups to potential investors. Yet the general requirement that persons soliciting investors must register with the Securities and Exchange Commission as broker-dealers and be subject to the SEC’s broker-dealer regulatory regime has been a source of much uncertainty for finders and companies alike and has posed a serious
Private Market Investing Not Just for the Wealthy Anymore?
The Securities and Exchange Commission expanded the definition of “accredited investor” by adding new categories of investors that have sufficient investment knowledge and expertise to participate in private investment opportunities. The amendments mark a shift away from wealth as the sole focus of eligibility. The new rule is effective 60 days after publication in the
Management and Common Stockholder Resistance to Acquisitions, and Using Carve-Outs to Overcome It
This past June, autonomous vehicle technology startup Zoox agreed to be acquired by
Amazon for a whopping $1.3 billion. Time for the common stockholders to pop the champagne, right? Not exactly, according to a complaint filed in the Delaware Court of Chancery by two common stockholders. Although many details have been redacted from the public
“Whoever has the Gold, (Once Again) Makes the Rules”: VC Deal Terms Likely to be More Investor Favorable
It’s no shocker that the Coronavirus pandemic has slowed down venture capital 
investment dramatically, with 2020 now on pace to be well below the high levels of the past couple of years. According to Pitchbook, VC deal flow through June 28 fell to just 4,675 funding rounds as compared with 6,357 in the first
The Upshot of Down Rounds
The impact of the Coronavirus and COVID-19 on venture capital investment will likely be 
similar to what we saw in the aftermath of the 2008 recession and the 2001 dot-com meltdown. VC investors will redirect their attention away from sourcing new deals and toward managing their existing portfolios, trying to determine which should survive and