News & Analysis as of September 23, 2024

General Solicitation › Due Diligence

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General Solicitation typically refers to the soliciting of investors to purchase securities. Prior to the passage of the JOBS Act in 2012, general solicitation was banned in connection with privately offered unregistered securities. Issuers were only permitted to offer such securities to investors with whom they had a pre-existing substantive relationship. Section 201(a) of the JOBS Act lifted the ban on general solicitation, but only with respect to accredited investors. less -

Do Your Due Diligence: Startups and Secondary Transactions

Willcox & Savage on 6/10/2022

Following reports that record numbers of investors in private startups are exploring selling equity before an IPO or liquidity event, it’s important to remember that secondary sales often pose issues that are not present in a...more

Finders Keepers

McCarter & English, LLP on 10/15/2020

SEC Proposes to Allow Finders to Receive Transaction-Based Compensation in Certain Limited Circumstances Without Having to Register as a Broker-Dealer- In an effort to help small and emerging businesses raise capital, the...more

Legal Considerations in Pre-IPO Crossover Financings

WilmerHale on 11/21/2017

An increasingly common financing strategy for companies expecting to conduct an initial public offering (IPO), particularly in the life sciences space, is to conduct a ‘‘crossover’’ financing shortly prior to the IPO....more

Using the Internet to Raise Money: Securities Laws and Crowdfunding

Buchalter on 10/12/2015

There are many services available to emerging companies to raise money through crowdfunding. As an entrepreneur or leader of a company evaluating these options, it is important to understand the basic legal foundations of...more

Crowdfunding and Real Estate Development

Sands Anderson PC on 9/17/2015

The real estate development market continues to open up to crowdfunding, and the changes to capital raising for real estate projects could be significant if only a small portion of the potential of these new methods take...more

FINRA’s New Research Rules

Latham & Watkins LLP on 8/28/2015

The new rules retain many of the current rules’ core requirements, but expand certain obligations and impose requirements on debt research activities for the first time. On August 26, 2015, the Financial Industry...more

Angels in Limbo: Congress and SEC Consider Regulatory Changes with Potential for Profound Effects on Start-Up Investments

K&L Gates LLP on 9/29/2014

Three events occurred during 2013 that have the potential to significantly affect angel investment around the country: (1) the Securities and Exchange Commission (“SEC”) lifted the prohibition on general solicitation for...more

New Rule 506(d) "Bad Actor" Disqualification - A Continuous Diligence Headache for Emerging Companies

McCarter & English, LLP on 8/26/2013

As required by the Dodd-Frank Act, the SEC on July 10, 2013, adopted final Rule 506(d) to "disqualify felons and other bad actors" from Regulation D private offerings. New Rule 506(d) identifies persons and triggering events...more

FINRA Actions and the Due Diligence Obligations of Broker-Dealers in Private Placements

Morrison & Foerster LLP - JOBS Act on 8/6/2013

Private placements and the due diligence obligations of broker-dealers in such transactions have recently come under increased scrutiny from FINRA as part of a broader trend reflected most notably in the filing requirements...more

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General Solicitation › Due Diligence

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