Using Regulation D Rule 506(c) to Raise Capital
One Note Samba
WORD OF THE DAY® – Big Boy Letter
Like an accordionist, real estate sponsors often seek to be innovative. Cutting-edge opportunities like crowdfunding and online selling platforms call to them. However, based on statistics from the Securities and Exchange...more
In a 3-2 vote held in November 2020, the SEC approved new rules and amendments to existing rules that are intended to harmonize, simplify and improve the private placement regime that start-ups and other issuers, small and...more
INTRODUCTION - On 2 November 2020, the U.S. Securities and Exchange Commission (SEC) adopted significant amendments to the exempt offering framework under the Securities Act of 1933, as amended (Securities Act), to harmonize,...more
Raising investment capital through private offerings has always been a challenge, especially for new and emerging investment managers. COVID-19 has exasperated this challenge by significantly limiting traditional means of...more
The Current Problem with Demo Days - Under U.S. federal securities law, any offer and sale of securities must either be registered with the Securities and Exchange Commission (SEC) or be conducted in compliance with an...more
In March 2018 the European Commission published a draft package of measures aimed at reducing barriers to the cross-border distribution of investment funds. The proposed approach involves aligning the rules between different...more
[author: Trevor Starer] The use of social media raises many securities law and compliance challenges for issuers, broker-dealers, and investment advisers. This Compliance Guide summarizes briefly some key principles. ...more
NASDAQ Private Markets and Morrison & Foerster recently described the process for verifying the status of investors when a company chooses to use general solicitation to conduct a Rule 506(c) offering. ...more
This week the SEC Division of Economic and Risk Analysis published a new report including a wealth of data regarding recent trends in public offerings and private placements of securities. The report includes a number of...more
In the wake of the 2008 financial crisis, Congress created the Jumpstart Our Business Startups Act (JOBS Act) to encourage capital formation in order to grow businesses, create jobs and spur economic activity. Congress and...more
United States Representative Steve Chabot of Ohio first introduced the Helping Angels Lead Our Startups Act (the “HALOS Act”) on February 9, 2016. Less than a month later, on March 2, 2016 the House Committee on Financial...more
On August 6, 2015, the Securities and Exchange Commission (SEC) staff issued important guidance concerning general solicitation and general advertising (collectively, general solicitation), including the use of online...more
The U.S. Securities and Exchange Commission (the “SEC”) on August 6, 2015, issued a no-action letter to Citizen VC, Inc. (the “Citizen Letter”) and new compliance and disclosure interpretations (“C&DIs”), providing...more
Earlier this month the SEC issued concurrently (i) the Citizen VC No Action Letter (in response to a request for guidance authored by Mintz Levin) relating to the use of 506(b) for a private placement online and (ii) a series...more
The SEC has recently provided clarity as to how an issuer of securities can conduct a private placement in a password protected web page under Rule 506(b), without it being deemed a “general solicitation” and thereby being...more
An enduring challenge of private equity is fund raising, whether in connection with fund formations, portfolio company financings or limited partner secondary sales. The recent modification of the SECs rules on general...more
Under Rule 506(c), companies can now engage in a general solicitation in conducting private placements but if they do so, they must verify that each purchaser is accredited. The SEC has provided some safe harbors for...more
Maybe, given that we’re living in the age of social media with Facebook “friends” and LinkedIn contacts, it shouldn’t be all that surprising that the value of relationships may appear to have diminished. In fact, in many...more
Today is a big day for issuers seeking to raise capital in private placements. For 80 years, issuers have been constrained in their private capital raising efforts: allowed only to reach out to those potential investors with...more
On July 10, 2013, the U.S. Securities & Exchange Commission (Commission) adopted rules eliminating the ban on general solicitation and advertising in certain private offerings, as required by Section 201(a)(1) of the...more
Background - On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the “JOBS Act”) into law. The JOBS Act is intended to “increase American job creation and economic growth by improving...more
Every Rule Must Play It’s Part, But This Part Is A Sad One - There is much to dislike in the SEC’s recent “bad actor” rule amendments. While Congress conceived the idea of disqualifying bad actors (Section 926 of the...more
New regulations approved by the Securities and Exchange Commission (SEC) in July 2013 give companies greater freedom to communicate with potential investors in certain private securities offerings, creating both new...more
So you want to jump into the fray and take advantage of the new opportunities created by the JOBS Act’s elimination of the ban on general advertising of private placements?...more
The Securities and Exchange Commission (“SEC”) recently took action to implement certain provisions of the Jumpstart Our Business Startups Act (“JOBS Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act...more