General Solicitation – Week One – Flying Cars And More

It began with announcements like this from AngelList.  For just $99 plus $25 per investment, wefunder will let you create a create a “beautiful profile” and send updates to followers, and provide free investment contracts, accredited investor verification, an escrow account and an electronic signature service.  SecondMarket is offering a similar solution. Heck, you can even invest in flying cars. You can find a pretty good summary of the madness here.

The SEC issued an investor alert on general solicitation and another one on the definition of accredited investors. The SEC even has a page where you can voluntarily upload your general solicitation. We’re not sure why anyone would want to do this, unless you’re trying to earn a good citizen award, and if you saw a slimy scheme and want to make a whistleblower tip and collect a reward, this is the wrong page.  In addition, the SEC issued a  Small Business Compliance Guide entitled “Disqualification of Felons and Other “Bad Actors.”  Hat tip to Broc Romanek of for pointing all this out.

For other information on Regulation D and general solicitation, see JOBS Act and Other Securities Law Essentials for Growing Companies.

Check frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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