Showing 14 posts from August 2013.
Check out our latest Law Alert describing some of the challenges for private issuers posed by the SEC's proposed changes to Rule 506.
The SEC has made its approach to Rule 506 difficult for many business persons to follow. On the July 10, 2013, the SEC adopted amendments to Rule 506 that lifted the ban on general solicitations in Regulation D offerings and also proposed additional amendments to Rule 506 that would impose new duties on private issuers engaged in Rule 506 offerings.
This two-fer has caused a great deal of confusion in the private equity world. Our Law Alert, SEC Proposed Amendments to Rule 506 Raise Challenges for Private Issuers, tries to sort out some of that confusion.
As long-time readers know, this blog began as a place for collecting articles and thoughts on renewable energy. Over time, however, that was just too restrictive and we began to cover emerging companies, securities law topics and the growing field of crowdfunding.
We struggled for awhile to find a better name to describe what we're doing and we finally stuck with Emerging Law.
The idea is to describe all the topics we're covering: renewable energy, start-ups, new ventures, high growth companies, private securities offerings and crowdfunding from the point of view of practicing lawyers who are engaged every day in advising clients on these topics.
In the coming weeks I'm expecting more of my colleagues from Taylor English Duma to start sharing their thoughts here. Our Firm has grown to more than 125 lawyers and our corporate and tax practice is nearly 30 lawyers. We've got a lot going on and I'm looking forward to sharing our thoughts with you.
Entrepreneurs in Canada contemplate a change in Canadian securities laws that would be similar to the JOBS Act.
If you haven't already seen it, check out this hilarious graphic on How to Choose a Crowdfunding Site.
TubeStart has launched a platform for crowdfunding as a means of monetizing YouTube video content.
In lieu of YouTube's ad-based monetization model, video creators can restrict their content to contributors who pay for a subscription or who make another 'crowdfunded' contribution.
CNBC describes some of the risks and opportunities involved in crowdfunding for medical device companies. Profiled platforms include B-a MedFounder, HealthFundr and MedStartr. All three platforms are limited to accredited investors.
The SEC finally responded, in a letter, to criticism leveled at the Commission by Representative Patrick McHenry (R-NC), one of the principal drafters of the 2012 JOBS Act. Representative McHenry had previously ripped the SEC's proposed rules regarding private offerings under Regulation D that would (1) require issuers to include mandatory disclaimers in general solicitation materials, (2) require issuers to file general solicitation materials with the SEC at least fifteen days before providing those materials to potential investors, and (3) generally increase the cost of compliance for issuers using general solicitations.
In its response the SEC promised to give "very careful consideration" to Representative McHenry's views, noting that its proposed rules were open for comment and that it would be premature to discuss what alternatives the SEC might purpose. In large measure, however, SEC Chair Mary Jo White largely dodged the criticism leveled by Representative McHenry and avoided any discussion of the specific points raised in his letter.
The SEC's proposed Regulation D rules are still pending public comment until September 23, 2013.
Perhaps one of the more interesting points out of the letter is the SEC's estimate of how many staff hours were devoted to the preparation of the proposed rule: 3,538 hours. That is roughly equivalent to the billable time that two associates in a large law firm would generate in an entire year.
Ryan Caldbeck, the founder of CircleUp, describes in Forbes how crowdfunding is disrupting capital markets.
As he describes it, the market for start-up financing is roughly $15 billion per year and has not changed in decades. The VCs and angels who make investments in early stage companies have an inefficient process for locating and assessing potential investments.
Caldbeck writes, "their approach to finding opportunities is not meaningfully different in 2013 than it was in 1953. It is an incredibly dispersed, difficult and inefficient market in which buyers (investors) and sellers (companies) have the best chance of connecting if they both attend long angel meetings just as they would have pre-Internet. At least they might get free shrimp along the way."
The prospect for crowdfunding is to create new markets for early-stage capital that will improve efficiencies in the process, generating economic benefits for both investors and entrepreneurs.
Following the example of states like Georgia and Kansas that permit intrastate offerings of securities on a crowdfunding basis, some legislators in Wisconsin are proposing a crowdfunding bill in that state's legislature.
According to reports, Representatives David Craig and Chad Weininger in the Wisconsin Assembly and Senator Leah Vukmir in the Wisconsin Senate are sponsoring the bill that will be unveiled in a ceremony today.
In a video for a new crowdfunding campaign on Kickstarter.
Link to video: http://www.memphisrap.com/2013/08/10/lady-gaga-gets-buck-and-naked-in-new-video-for-crowdfunding-project-photos/
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