The final Title III Equity Crowdfunding rules contain a number of changes from the proposed rules. Some of the changes are good, and some are arguably not so good. On the good side: First time issuers raising more than $500,000 and up to $1 million will not have to have their financial statements audited. Instead,Continue reading “Title III Equity Crowdfunding: The Final Rules”
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Equity Crowdfunding: “Communication Channels”
Perhaps one of the most interesting aspects of the new Title III Equity Crowdfunding Rules is Rule 303(c). Rule 303(c) of Regulation Crowdfunding requires an intermediary to provide, on its platform: Channels through which investors can communicate with one another and with representatives of the issuer about offerings made available on the intermediary’s platform. AnContinue reading “Equity Crowdfunding: “Communication Channels””
Equity Crowdfunding: The 12(g) Problem
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”
Rule 147: Good News
The SEC has proposed changes to Rule 147. You can find the proposed amendments here. Rule 147 is one of the federal securities law rules that makes state-level equity crowdfunding more difficult. The reason? Rule 147 is the rule issued pursuant to Section 3(a)(11) of the Securities Act of 1933. Section 3(a)(11) is the statutory basisContinue reading “Rule 147: Good News”
Washington State Equity Crowdfunding
As part of Seattle Startup Week I am giving a talk on equity crowdfunding. The talk will be this Friday. There is a link about the event on the Seattle Startup Week calendar. Washington State was one of the first state’s to have a state-level equity crowdfunding law. In fact, Washington State might have beenContinue reading “Washington State Equity Crowdfunding”
Equity Crowdfunding: SEC To Vote This Friday
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 holdContinue reading “Equity Crowdfunding: SEC To Vote This Friday”
Finders: Recommendations to the SEC
The SEC’s Advisory Committee on Small and Emerging Companies recently issued recommendations regarding the regulation of finders. If you are not familiar with the rules, the SEC takes a very narrow view of who can help companies find investors without having to register as a broker-dealer. Broker-dealer registration is so onerous that people won’t engageContinue reading “Finders: Recommendations to the SEC”
Rule 701 Math: The 15% of Shares Test
If you are administering a private company stock option plan, you need to do what is referred to as “the Rule 701 math” before every grant of stock options or equity awards. What is “the Rule 701 math”? Rule 701 contains a set of mathematical limitations on how many shares of stock you can offer service providersContinue reading “Rule 701 Math: The 15% of Shares Test”
Rule 701
What is Rule 701? And if you are a startup or emerging company, why do you need to know about it? Rule 701 is a federal securities law exemption for issuing equity to employees, contractors and advisors. You need a securities law exemption or registration statement in place to issue securities, and so finding and complyingContinue reading “Rule 701”
Pitching Folks You Just Met
Startups raising money need to know how to do so in compliance with federal and state securities laws. The trouble is–it is not always easy to know what the rules are. To make it more difficult, the rules keep changing. Congress passes new laws. The SEC issues new regulations. All of it becomes difficult andContinue reading “Pitching Folks You Just Met”