The Accredited Investor Definition: Let’s Not Index it to Inflation

The first bill out of the new Congress next year might set the accredited investor definition to adjust with inflation. As the bill is currently drafted, every 5 years the financial thresholds would go up based on inflation. The bill is called the Financial Choice Act. You can find it here. I think this is … Continue reading The Accredited Investor Definition: Let’s Not Index it to Inflation

Indexing the Accredited Investor Standard to Inflation: A Bad Idea

Now that the election is over, it is unclear, at least to me, which direction startup public policy will take. It is in all of our best interests that we have a startup public policy that promotes innovation and creativity. Too often we have laws that slow us down, impede us, or flat out make … Continue reading Indexing the Accredited Investor Standard to Inflation: A Bad Idea

Accredited Investor: Two Tier System Coming?

The staff of the SEC has issued its report on the definition of “accredited investor.” It could be what we are looking at is the following: a “super accredited investor” definition (credit to Bill Carleton for coining this term), and the current definition–but if you don’t qualify as a “super accredited investor” you will be … Continue reading Accredited Investor: Two Tier System Coming?

The Two Definitions of Accredited Investor

You may not be aware, but the federal securities laws contains two definitions of the term accredited investor. One definition is helpful to startups, and the other is not. The definition of accredited investor that is helpful to startups is found in Regulation D. Rule 506 of Regulation D is the securities law exemption used … Continue reading The Two Definitions of Accredited Investor

Accredited Investor: Let’s Let People Test In

The idea that you can “test in” to accredited investor status is gaining momentum. Rep. Schweikert (R-Ariz.) has introduced a bill that would do just that. His bill has passed out of the House Financial Services Committee and is apparently headed to the floor of the House. You can track the progress of the bill … Continue reading Accredited Investor: Let’s Let People Test In

Accredited Investor: Your Chance to Comment

The SEC staff has issued its first report on the definition of the term “accredited investor.” Dodd-Frank requires the SEC to review and report on the definition of “accredited investor” every four years: to determine whether the definition should be modified or adjusted for the protection of investors, in the public interest, and in light … Continue reading Accredited Investor: Your Chance to Comment

Secondary Sales and An Investor Covenant You Don’t Want To Miss

If you are investing in early stage companies, there are certain deal terms you want. Most you probably know already: if it’s a round of convertible notes, you want a discount and a cap; if it’s a priced round, you want a liquidation preference. Etc. But there is a new thing you need to add … Continue reading Secondary Sales and An Investor Covenant You Don’t Want To Miss

Washington State Equity Crowdfunding Update

Good news! Senators Fain and Mullet have sponsored SB 5680 in the Washington State Senate. This is the same bill as HB 1593 in the House. The bill would make important technical improvements to Washington State’s equity crowdfunding law The highlights of the bill include: Allowing Delaware corporations to use Washington State’s equity crowdfunding law. … Continue reading Washington State Equity Crowdfunding Update

Washington State Equity Crowdfunding Update

My colleague Danny Neuman and I testified this morning in support of HB 1593. This bill would improve the Washington State equity crowdfunding law. The bill is sponsored by Representatives Vick and Kirby. HB 1593 Would Do a Number of Helpful Things HB 1593 would do the following: Eliminate the quarterly public disclosure of executive officer … Continue reading Washington State Equity Crowdfunding Update

Recommended Improvements to Washington’s Equity Crowdfunding Law

By Daniel Neuman.  I am a corporate and securities lawyer, working primarily with startups and early-stage companies in Seattle. I testified yesterday before the Washington State House of Representatives Business & Financial Services Committee regarding the state’s Equity Crowdfunding law, and presented a list of recommendations for how to improve the regulations and make the law … Continue reading Recommended Improvements to Washington’s Equity Crowdfunding Law