One of the most overlooked and problematic issues concerning capital raising by small businesses, venture capital funds, and private equity funds is the use of “finders” to assist issuers with raising capital. Those who act...more
At age 79, Paul Anka, the crooner and songwriter, is more relevant than ever. In 2020, he appeared on Season 4 of “The Masked Singer,” enjoyed a popular resurgence courtesy of TikTok, reworked his anthem “My Way” for the...more
A Securities and Exchange Commission (“SEC”) plan to create a registration exemption for certain finders has generated a mixed response. The nearly 90 comments received by the SEC by the November 12, 2020 close of the comment...more
In order to clarify various no action letters and court decisions, the Securities and Exchange Commission (SEC) has proposed an rule that would allow two classes of “finders” to avoid having to register as a broker-dealer or...more
On October 7, 2020, the Securities and Exchange Commission (SEC) proposed to address long-standing questions regarding the applicability of the broker registration requirements to finders for small and emerging businesses....more
Easing of restrictions may be on the way for smaller issuers seeking to rely on “finders” to assist with their capital raising efforts. On October 7, 2020, the U.S. Securities and Exchange Commission (the “SEC”) proposed a...more
The ability to raise capital is one of the most critical challenges facing small businesses in the U.S. today. Capital can allow for exponential growth of a well-run startup with a good idea, but the lack of capital is the...more
Finders seeking to assist companies in raising capital are required to navigate an often cloudy path to determine whether the finder's activities and any compensation the finder would receive for its services would run afoul...more
SEC Chairman Jay Clayton recently noted that: “Many small businesses face difficulties raising the capital they need to grow and thrive . . . [and] finders may play an important role in facilitating capital formation for...more
On October 7, 2020, the U.S. Securities and Exchange Commission (“SEC”) voted 3-2 to propose a conditional exemption (“Exemption”) to permit natural persons to engage in limited securities activities as “finders” on behalf of...more
On October 7, 2020, the Securities and Exchange Commission (“SEC” or “Commission”) voted to propose a new limited, conditional exemption from the broker registration requirements of Section 15(a) of the Securities Exchange...more
Early stage companies almost always lack two critical resources: time and money. Not only do they barely have enough time to run the business, but they definitely don’t have the time to raise the cash necessary to fund...more
This alert provides a brief discussion of the practice of using unregistered “finders” in the context of a private securities offering. We provide background on the process, discuss various risks and considerations, and...more
It was a productive morning at the last meeting of its current term for the SEC Advisory Committee on Small and Emerging Companies. The Committee, which has been renewed for two more years, approved three recommendations to...more
During their July 15 open telephone meeting, the SEC’s Advisory Committee on Small and Emerging Companies continued discussion on the regulatory treatment of “finders” and disclosure effectiveness relating to small...more