Category Archives: Uncategorized

Congress is preparing a bill known as the Financial CHOICE Act of 2016. There is a lot in the bill (and so it is worth scanning the table of contents for issues you might care about). One of the provisions of the bill, Section 1066, would revise the Form D filing requirements to make them easier onContinue reading “The Financial Choice Act: How to Make it Better re Form D”

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”

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 isContinue 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 lawsContinue reading “Indexing the Accredited Investor Standard to Inflation: A Bad Idea”

Section 201(a) of the JOBS Act repealed the ban on generally soliciting or generally advertising private securities offerings, provided certain conditions were met.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”

The SEC adopted final rules today to facilitate intrastate crowdfunding offerings. Intrastate Crowdfunding Intrastate crowdfunding is a phenomenon I am not sure many people anticipated. In the wake of the JOBS Act, when everyone was waiting for the SEC to finalize the Title III JOBS Act equity crowdfunding rules, states started passing their own laws.Continue reading “Intrastate Crowdfunding: SEC Adopts Helpful Rules”

The SEC has announced that it is going to have a meeting next Wednesday, October 26, 2016, at 10:00 a.m. Eastern Time to consider whether to adopt rule amendments to facilitate intrastate crowdfunding offerings. The SEC might adopt an entirely new exemption for intrastate crowdfunding offerings. The trouble with the current intrastate crowdfunding legal landscape is that SectionContinue reading “Intrastate Crowdfunding: SEC Meeting Next Wednesday”

By Susan Schalla & Joe Wallin If you are not familiar, Section 1202 of the Internal Revenue Code provides startup founders and investors with a very significant potential tax break on the ultimate sale of their stock, if the stock is “qualified small business stock.” What is the Tax Break? The tax break is significant.Continue reading “Qualified Small Business Stock: Redemption Issues”

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 onContinue reading “Employee Stock Ownership: Empowering It Through A New Law”

I have heard this a number of times in regards to S Corporations & Blank Check Preferred Stock: “A corporation cannot make an S election if it has preferred stock authorized in its charter, even if the preferred stock is ‘blank check,’ meaning it doesn’t have any rights, preferences and privileges ascribed to it, andContinue reading “S Corporations & Blank Check Preferred Stock”