Using Regulation D Rule 506(c) to Raise Capital
Summer Enforcement Action Review; Raising Money in a Pandemic - Investment Management Roundtable Discussion
Ropes & Gray’s PEP Talk: General Solicitation by Private Equity Funds Under 506(c)
Types of Crowdfunding
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
Many start-up founders and entrepreneurs, need to raise money for their new ventures. Typically, you would raise money through the sale of securities. What are securities?...more
Under the Securities Act of 1933 (1933 Act), all securities offerings must be registered with the SEC unless there is an exemption. Registering securities is a costly and time-consuming process requiring SEC review and...more
And so it begins. There have been two recent speeches from Commissioners touching on the private markets; Commissioner Lee’s was the most recent and most specific. The Commissioner suggests that the Securities and Exchange...more
It’s pretty common for issuers in follow-on offerings to solicit investors from previous rounds first. Indeed, doing so is often mandatory when early investors have preemptive rights. ...more
On November 2, 2020, the Securities and Exchange Commission (the SEC) voted to adopt final amendments (the Amendments) to “simplify, harmonize, and improve certain aspects of the exempt offering framework.” The Securities Act...more
On November 2, 2020, the Securities and Exchange Commission (SEC) amended several rules to harmonize requirements for exempt offerings, which will be effective in 2021 (60 days after publication in the Federal Register). The...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
Finders play a vital role in introducing startups to potential investors. Yet the general requirement that persons soliciting investors must register with the Securities and Exchange Commission as broker-dealers and be...more
In this podcast, Greg Nowak, a partner in Troutman Pepper’s Investment Management and Compliance and Hedge Funds Practice Groups, is joined by Evan Katz, Managing Director of Crawford Ventures, Inc., for a candid review of...more
Access to invest in private placement securities reminds me of All-State Orchestra. Private placements provide unique investment opportunities that can help investors diversify their portfolios. Yet, most private placements...more
Non-accredited investors are estimated to constitute approximately 92% of the U.S. population. Yet restrictive rules governing exempt offerings have significantly limited their freedom to invest in private offerings and...more
This article expands upon a recent overview of the securities law exemptions commonly used for investment crowdfunding campaigns. The six distinct exemptions or "paths" outlined below are the most commonly used by...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
Chair White spoke at the Annual Securities Regulation Institute in San Diego last week and participated in a Q&A session. We have highlighted below commentary on topics of interest to our readers....more
The next few years may be the largest watershed event in opening up private equity capital since the 1980s when Regulation D was first published by the Securities and Exchange Commission (“SEC”). By allowing general...more
The SEC granted no-action relief to Citizen VC, Inc. which appears to state, although subject to facts and circumstances, a pre-existing relation can be formed with a person that first contacts a seller of securities over the...more
Since the enactment of the Jumpstart Our Business Startups Act (the “JOBS Act”) in 2012, the Securities and Exchange Commission (“SEC“) has slowly been making its way through the titles to the JOBS Act to promulgate the final...more
Philip Schroeder, Esq. discusses the types crowdfunding: • Donation Model Crowdfunding (e.g.) Kickstarter • Rewards Model Crowdfunding • Equity Crowdfuning o Sales to Accredited Investors...more
The Securities Industry and Financial Markets Association (SIFMA) issued a memorandum (the “Memorandum”) with guidance for registered broker-dealers and investment advisers on various non-exclusive means of verifying an...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
The availability of the private placement exemption under SEC Rule 506 depends in large measure upon determinations that purchasers are “accredited investors” under the rules. Where there is no general solicitation, Rule...more
As mandated by Congress in Section 201(a) of the Jumpstart Our Business Startups Act, in July 2013 the Securities and Exchange Commission (SEC) amended Rule 506 under Regulation D of the Securities Act of 1933, creating a new...more
On July 3, 2014, the Securities and Exchange Commission (SEC) issued six new Compliance and Disclosure Interpretations (CDIs) regarding the determination and verification of accredited investor status for purposes of Rule...more
In early July, the Securities and Exchange Commission’s (SEC) Division of Corporation Finance issued several new interpretations (at 255.48-49 and 260.35-38) (C&DI) relating to the verification of “accredited investor” status...more