Is due diligence going to get a whole lot more complicated for angel...
In recent rule-making, the SEC, at Congress’s behest, has proposed a rule that will increase due diligence requirements for Rule 506 offerings, which are the type of securities offering most frequently...
View ArticleAngel Capital Association Weighs in on Proposed “Bad Actor” Rule
Previously, I discussed the impact that the proposed “bad actor” rule will have on angel financings and offerings of interests in private investment funds. By prohibiting the use of Rule 506 of...
View ArticleIs securities law compliance really all that important for a small company...
One of the things that new entrepreneurs often find most shocking is the degree of restrictions that both the federal and state governments impose on their capital raising activities. To them, it is...
View ArticleBill Introduced in Congress to Permit Private Companies to Stay Private for...
Representative David Schweikert (R-AZ) recently introduced a bill called the “Private Company Flexibility and Growth Act,” which promises to allow private companies to remain private for a longer...
View ArticleCan a friends and family round include non-accredited investors? Should it?
The so-called “friends and family” round is often the first capital raise a new startup will engage in. Many entrepreneurs often go into it without any knowledge of securities laws and as a result, end...
View ArticleCould a proposed crowd funding securities exemption ever catch on?
Recently, I came across an online petition proposing a new “Startup Exemption” to federal securities registration requirements. You can find the petition at this website: www.startupexemption.com. Like...
View ArticlePrivate Placements: What happens if you fail to file Form D (or file it late)?
Form D is a document that the SEC requires a company to file when it issues securities in a private placement under Regulation D. It must be filed with the SEC within 15 days of the first sale of a...
View ArticleIs action forthcoming on a crowdfunding exemption to Federal securities laws?
Previously, I highlighted a proposed Startup Exemption to Federal securities laws, which would allow small companies to “crowdfund” (i.e. raise small amounts of money as startup capital from a large...
View ArticleShould you ask potential investors to sign an NDA?
I am frequently asked by entrepreneurs whether I think a startup should ask potential investors to sign a non-disclosure agreement (NDA). While the answer depends largely on the situation, my view is...
View ArticleRep. McCarthy (R-CA) introduces legislation to eliminate ban on general...
Representative Kevin McCarthy (R-CA and House Majority Whip) recently introduced the Access to Capital for Job Creators Act (H.R. 2940), which would remove the ban on general solicitation for...
View ArticleWhat does the future hold for crowdfunding legislation?
Previous, I summarized the Entrepreneur Access to Capital Act (H.R. 2930), a bill which provides for a crowdfunding exemption to the registration requirements of federal and state securities laws. The...
View ArticleWorking Effectively with Your Lawyer: Don’t “Recycle” Legal Work
Recycling is generally considered a good thing when it comes to trash. It helps the environment and conserves resources. However, in the context of legal work, it is not such a good thing. Of...
View ArticleU.S. House Votes to Adopt Six Measures Loosening Securities Regulation for...
The U.S. House of Representatives voted earlier today (March 8, 2012) to pass the Jumpstart Our Business Startups (JOBS) Act. The bill is actually a compilation of six separate measures that have been...
View ArticleThe JOBS Act, a Year Later – Part 1: Introduction
It’s been almost a year since Congress passed the Jumpstart Our Business Startups Act (or JOBS Act). At the time, the passage of this bill was greeted with significant enthusiasm from the start-up...
View ArticleClik here to view.
Dos and Don’ts of Conducting a Rule 506(b) Offering
When raising capital, a company must comply with securities laws. As previously discussed, all offerings of securities, must either be registered with the SEC or exempt from such registration. Rule...
View ArticleClik here to view.
What is a Private Placement Memorandum?
A Private Placement Memorandum, or “PPM,” is a disclosure document often used in connection with a private offering of securities. It contains a compilation of information about the company issuing...
View Article
