In its most recent meeting on September 23, 2015, the Securities and Exchange Commission’s Advisory Committee on Small and Emerging Companies recommended specific reforms that would significantly liberalize the rules governing private offering intermediaries and make it easier for companies to use them. If adopted, these reforms could greatly enhance the capacity of startups and
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…
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…
To Improve Small Company Liquidity, SEC Chairman Announces Tick-Size Pilot
SEC Chairman Mary Jo White gave her state of the Commission speech on Friday at the “SEC Speaks 2014” conference in Washington, D.C. But if you were distracted for a moment by the sight of hoodie-clad Mark Cuban live-tweeting at the conference, you may have missed this one paragraph in the speech:
“In 2014…
Free at Last: General Solicitation and Advertising in Private Offerings Begins September 23
The new SEC rules lifting the ban on general solicitation and general advertising in certain private offerings go into effect today, September 23, 2013. Beginning today, issuers in Rule 506 offerings may generally solicit investors and advertise their offerings provided they take reasonable measures to ensure that each purchaser is an accredited investor. The new…
General Solicitation Ban Lifted from Rule 506 Private Offerings, But Issuers Must Verify all Purchasers are Accredited
The SEC on July 10 finally lifted its 80-year old ban on general solicitation and general advertising in Rule 506 offerings, as Congress directed it to do last year in the JOBS Act. When the new rules go into effect in September, issuers will be able to use social media, the internet, blogs, email and…
SEC Report on Small Business Capital Reform
Last month, the SEC released its Final Report on the 2012 SEC Government-Business Forum on Small Business Capital Formation, the SEC’s annual forum to address perceived unnecessary impediments to small business capital formation. Participants typically include small business executives, VCs, government officials, trade association representatives, lawyers, accountants, academics and small business advocates. The Report contains…
SEC “Likes” Social Media Disclosure, So Long as Investors are Alerted
On July 3, 2012, Netflix CEO Reed Hastings kicked off the holiday weekend with some fireworks of his own by posting on his personal Facebook page that Netflix had streamed a billion hours of content in the month of June. Hastings designated the post as “public,” making it available to anyone on the Internet, including…