The SEC has scheduled a meeting for this coming Friday to vote on the final equity crowdfunding rules under the JOBS Act. The SEC’s notice of the meeting says: Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94-409, that the Securities and Exchange Commission will hold … Continue reading Equity Crowdfunding: SEC To Vote This Friday
Once again I had the fun opportunity to work on a writing project with Lauren Hakala from Practical Law. This time we updated the previous piece we had written on General Solicitation, to take into account the recent SEC guidance. General Solicitation: What Are the Highlights of the SEC’s New Guidance? The SEC provided helpful … Continue reading General Solicitation & Startup Capital Raising
Is a Demo Day a general solicitation of securities putting your company in Rule 506(c) as opposed to 506(b)? The SEC has issued new guidance on this question. Per the SEC’s new guidance, a Demo Day is not necessarily a general solicitation. However, it depends on what you do at the Demo Day. If you … Continue reading Is a Demo Day General Solicitation?
There is a lot of confusion in the early stage company ecosystem about general solicitation. When you are trying to sell shares in your company (or a convertible note, or convertible equity), how much can you say about that in the media? Can you post something on Facebook? On Twitter? On LinkedIn? How about emailing a … Continue reading General Solicitation: Can I Generally Solicit My Offering?
Last Thursday the SEC issued guidance on what constitutes general solicitation. This guidance is helpful to companies trying to conduct Rule 506 offerings. Thanks to the JOBS Act, we now have two types of Rule 506 offerings. Those that cannot be generally solicited and those that can. This might sound harmless but if you generally … Continue reading New SEC Guidance on General Solicitation
Guest post by Teresa Daggett First, let’s get the terminology of term sheets out of the way. Whether the document that outlines your deal is called a “term sheet,” a “memorandum of understanding” or a “letter of intent,” these terms mean essentially the same thing. We will use “term sheet” in this article, but the … Continue reading Term Sheets: Binding & Non-Binding
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
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 small … Continue reading 506(c) Offerings: Let’s Fix the Verification Rules
Broad-based employee stock ownership is one way to ensure that the wealth created in startups is widely shared by those who helped create the wealth. But broad-based stock ownership in private companies is thwarted by our tax code. Our tax code discourages the sharing of stock ownership among a company’s workers by taxing workers on … Continue reading Employee Stock Ownership: Empowering It Through A New Law
By Dan Wright of Clark Nuber and Joe Wallin Warrants can be confusing from a tax point of view. There are a couple of reasons for this. But the primary reason is probably because how a warrant is taxed is driven by the factual circumstances under which it was issued. Was it issued as part … Continue reading Warrants: The Tax Story