Search results for: accredited investor

Section 201(a) of the JOBS Act repealed the ban on generally soliciting or generally advertising private securities offerings, provided certain conditions were met. Many people believed that this change in the law would be one of the most dramatic brought about by the JOBS Act. But things didn’t go as planned. Today, only a smallContinue reading “506(c) Offerings: Let’s Fix the Verification Rules”

You may not be aware, but the federal securities laws contain 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 usedContinue reading “The Two Definitions of Accredited Investor”

By Evan Jensen and Joe Wallin and Jordan Rood If you are considering token sales and selling blockchain tokens in the U.S., you not only have to worry about the U.S. federal securities laws (see the latest from the SEC here), but also the laws of each state within the U.S. in which you sellContinue reading “Token Sales & The Risk Capital Test”

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 lightContinue reading “Accredited Investor: Your Chance to Comment”

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 billContinue reading “Accredited Investor: Let’s Let People Test In”

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 a more effective fundraising tool. Raising money is a hard job for startups. It is made harder because thereContinue reading “Recommended Improvements to Washington’s Equity Crowdfunding Law”

Ashley Stewart (@ashannstew) recently wrote a great piece in the Puget Sound Business Journal on Washington State equity crowdfunding titled “Crowdfailure: Not a single company has been able to use Washington’s 2-year-old crowdfunding law.” She also wrote an accompanying blog post. Washington State Equity Crowdfunding The article tells the story of a company frustrated atContinue reading “Washington State Equity Crowdfunding News”

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 addContinue reading “Secondary Sales and An Investor Covenant You Don’t Want To Miss”

If you are looking for the complete text of new Section 4(a)(7) of the Securities Act of 1933, as amended, I have quoted it in full below. You can also find the entire text of the Fixing America’s Surface Transportation Act or the “FAST Act” at this link. This new law makes it substantially easierContinue reading “The Text of New Section 4(a)(7)”

You might be wondering what I am talking about when I say that there is a 12(g) problem with equity crowdfunding. What is Section 12(g), anyway? Section 12(g) is a section of the Securities Exchange Act of 1934 that requires companies to start reporting as a public company if they allow themselves to have tooContinue reading “Equity Crowdfunding: The 12(g) Problem”