News & Analysis as of

Not All Investors Are Created Equal In The Eyes of the SEC: Why You Should Consider Only Accredited Investors in Your Startup

It is exciting to have people willing to invest money into your company. But before you sell any equity to friends, family or others, consider whether they are "accredited investors." ...more

Advisory Committee’s Recommendations: Positive Sign for South Florida Companies

We previously discussed the SEC’s decision to allow businesses to solicit accredited investors and what this could mean for the growth of companies in Florida. Now, the SEC is weighing whether the definition of ‘accredited...more

Meeting of the SEC Advisory Committee on Small and Emerging Companies

The Securities and Exchange Commission’s Advisory Committee on Small and Emerging Companies met on March 4 to discuss various topics related to facilitating the secondary market for trading securities of small and emerging...more

CSA Announce Amendments to Accredited Investor, Minimum Amount and Short-Term Debt Prospectus Exemption Rules

On February 19, 2015, the Canadian Securities Administrators (CSA) announced amendments to National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106), which are expected to come into force this spring....more

Financial Services Bulletin: Action at the SEC

The SEC Proposes JOBS Act Registration Rules - On Thursday, December 18, 2014, the Securities and Exchange Commission (the “SEC”) proposed rule amendments to implement Title V and Title VI of the Jumpstart Our Business...more

Toward a Transactional Exemption for Emerging Company Investments

In “Bringing the Individual Accredited Investor Definition into the 21st Century,” which was posted on December 18th of last year, it was suggested that there might be certain common venture capital transactional structures...more

Types of Crowdfunding [Video]

Philip Schroeder, Esq. discusses the types crowdfunding: • Donation Model Crowdfunding (e.g.) Kickstarter • Rewards Model Crowdfunding • Equity Crowdfuning o Sales to Accredited Investors...more

Advisory Committee will Consider Accredited Investor Definition

The SEC announced that at the December 17th meeting of the Advisory Committee on Small and Emerging Companies, the group will focus on the definition of “accredited investor.” ...more

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

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

Can You Raise Money From Investors Who Are Not “Accredited Investors”?

A question I receive frequently from entrepreneurs raising capital for the first time is whether they can raise money from people who do not meet the SEC definition of “accredited investors.” The easy answers are “you...more

Verifying Accredited Investors in Public Rule 506 Offerings: SIFMA Guidance

On June 23, 2014, the Securities Industry and Financial Markets Association (SIFMA) published a memo outlining several specific methods for verifying accredited investor status that SIFMA believes would satisfy the...more

In Case You Missed It - Interesting Items for Corporate Counsel (Cumulative)

As forecast, there is no shortage of law firm memos describing Regulation D changes, including the final rules eliminating the general solicitation ban (here) and prohibiting "bad actor" participation (here) and the proposed...more

Lawmakers Claim SEC Proposals Are Contrary To JOBS Act

The SEC recently issued proposals related to Regulation D which, among other things, require a Form D to be filed fifteen days before a general solicitation under Rule 506(c) can commence....more

SEC Approves JOBS Act Requirement to Lift General Solicitation and Advertising Ban Under Rule 506

On July 10, 2013, the SEC voted to lift the ban on general solicitation and advertising for offerings limited to accredited investors under Rule 506 and for offerings under Reg. 144A of the Securities Act of 1933....more

Crowdfunding Not Quite As Open As Recent Reports May Suggest

My friends in the start-up community are excited about recent headlines suggesting the SEC has greenlighted crowdfunding. Leave it to the lawyer in the crowd to suggest they temper their excitement. As lawyers, we are used...more

The SEC Staff Permits Sponsors of Securities Trading Platforms to Receive Incentive Compensation

One of the goals of the JOBS Act was to encourage the development and use of platforms that permit accredited investors to invest in early stage and other private companies. The JOBS Act contains a provision that expressly...more

SEC Says Crowdfunding VC Site Not A Broker-Dealer

Thefundersclub.com operates a really cool website. The publicly available page advertises “The best way to invest in startups. Insider access to pre-vetted startups. Low minimum investment sizes. Free membership. Join...more

Eureka! Bill Introduced To Homologate Finders

Questions about the use of finders have bedeviled transactional lawyers for years. The need for finders is the unintended consequence of the federal and state securities law exemptions that are conditioned on the absence of a...more

Why Is A PPM Like A BLT?

PPMs (Private Placement Memos for the uninitiated) look pretty complicated. They’re usually thick documents full of run-on sentences, some charts and a few paragraphs in all caps. A client asked me to describe a PPM’s...more

The SEC Proposed Rule 506(c) To Permit General Solicitation

On August 29, 2012, the Securities and Exchange Commission (the “SEC”) released its first proposed rule for the implementation of the Jumpstart Our Business Startups Act (the “JOBS Act”): “Eliminating the Prohibition Against...more

The SEC Proposed Rule 506(c) To Permit General Solicitation

On August 29, 2012, the Securities and Exchange Commission (the “SEC”) released its first proposed rule for the implementation of the Jumpstart Our Business Startups Act (the “JOBS Act”): “Eliminating the Prohibition Against...more

Update on Timeline for SEC Rulemaking to Implement the JOBS Act and Dodd-Frank Act

In recent weeks, the SEC has given notice of matters that SEC Commissioners will consider at an open meeting on August 22, 2012, including: - general solicitation rulemaking required by Title II of the JOBS...more

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