Ever since the Federal securities laws were enacted in 1933, all offers and sales of securities in the United States had to either be registered with the SEC or satisfy an exemption from registration. The commonly used private offering exemption, however, prohibited any act of general solicitation. The JOBS Act of 2012 created a new
JOBS Act
Fix Crowdfunding Act Would Cure Title III Crowdfunding Ills
Beginning on May 16, issuers for the first time will be able to offer and sell securities online to anyone, not just accredited investors, without registering with the SEC. The potential here is breathtaking. Some $30 trillion dollars are said to be stashed away in long-term investment accounts of non-accredited investors; if only 1% of…
Working the Crowd: A Primer for Funding Portals
One of the key investor protections of Regulation Crowdfunding under JOBS Act Title III is the requirement that offerings must be conducted exclusively through a single platform operated by a registered broker-dealer or a new type of SEC registrant, a funding portal. Although SEC registration for funding portals began January 29, 2016, intermediaries (funding portals …
Trick or Treat? SEC Adopts Controversial Crowdfunding Rules
At an open meeting on October 30, 2015, the Securities and Exchange Commission by a three-to-one vote adopted final rules for equity crowdfunding under Section 4(a)(6) of the Securities Act of 1933, as mandated by Title III of the Jumpstart Our Business Startups Act. The final rules and forms are effective 180 days after publication…
New SEC Guidance on What Constitutes “General Solicitation”
August 6, 2015 was a productive day for the Staff of the Securities and Exchange Commission’s Division of Corporation Finance on the issue of the prohibition on general solicitation in the context of online private offerings under Rule 506(b). My last blog post, entitled “It’s Complicated”: Establishing “Preexisting Relationships” with Prospective Investors, analyzed the…
“It’s Complicated”: Establishing “Preexisting Relationships” with Prospective Investors
In my last post, I blogged about online funding platforms. In that post, I described the typical model of indirect investing through a special purpose vehicle (“SPV”) with the platform sponsor taking a carried interest in the SPV’s profits from the portfolio company and no transaction fee, as a means of avoiding broker-dealer regulation.…
What’s the Deal with Online Funding Platforms?
Lately I’ve been approached by current and prospective clients about online funding platforms, either by folks interested in forming and operating them or those interested in raising capital through them. There seems to be a lot of confusion surrounding how they work and what the legal issues are, so here’s my attempt to bring some…
Weak First Quarter for U.S. Venture-Backed IPOs
The market for venture backed IPOs in the U.S. in the first quarter of 2015 was the weakest in two years, both in terms of number of deals and aggregate proceeds, according to pre-IPO institutional research firm Renaissance Capital, as well as a separate exit poll report by Thomson Reuters and the National Venture…
New Regulation A+ Published in Federal Register — Will Become Effective June 19
The Regulation A amendments adopted by the Securities Exchange Commission on March 25 are being published tomorrow, April 20, in the Federal Register. That means the final rules and form amendments will officially become effective on June 19, 2015 (by rule, 60 days after such publication).
The new Regulation A, referred to widely as…
SEC Adopts Final Reg A+ Rules for Mini Public Offerings of up to $50 Million without Registration
The SEC yesterday issued its highly anticipated final rules amending Regulation A to allow issuers to raise up to $50 million in any 12 month period through public offering techniques but without registration with the SEC or state blue sky authorities. The 453 page rules release features a scaled disclosure regime to provide issuers with…