Emerging Markets Law

Showing 129 posts in Crowdfunding.

Boston Brewpub Hopsters Raises Fastest Reg CF Crowdfunding Ever

Posted In Crowdfunding

A brew pub—Hopsters Brewery—has raised more than $600,000 in what industry insiders are calling the "fastest crowdfund offering ever."  

The Boston-area brew pub and eatery used the WeFunders platform to raise funds in roughly two weeks.

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SEC Adopts Changes to Rules 147 and 505

Posted In Crowdfunding, JOBS Act, SEC, Securities

The Securities and Exchange Commission (SEC) on October 26, 2016, voted to update Rules 147 and 504.

These changes reflect the increased use of Rule 147 in connection with intrastate securities offerings, often in combination with state intrastate crowdfunding rules. The revision to Rule 504 reflects the increased usage of Regulation D in connection with private offerings and the liberalization of private offerings under the 2012 JOBS Act and the SEC’s Regulation CF. Because the SEC took more than three years to implement the crowdfunding provisions in Title III of the JOBS Act, may state regulators and legislators took steps to implement intrastate crowdfunding rules as contemplated by Rule 147. Those state rules, in many respects, were more permissive than what the SEC had previously allows. As a result, the North American Securities Administrators Association joined with a bipartisan group from Congress to support these changes.

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Qualified Small Business Stock

Posted In Crowdfunding, Securities, Tax

Entrepreneurs and angel investors often ask whether an investment in a particular start-up will qualify as “qualified small business stock” for purposes of Section 1202 of the Internal Revenue Code (the “IRC”). 

IRC Section 1202 creates a powerful incentive for investors to invest in qualified small business stock. If all the requirements of Section 1202 apply, an investor may exclude from income between 50% and 100% of the gain the investor realizes upon a qualifying sale of that small business stock that the investor has held for five years or more. In other words, under some circumstances, the investor’s gain can be tax-free!

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SEC Compliance and Disclosure Interpretations on Regulation CF Crowdfunding

Posted In Crowdfunding, SEC, Securities

The SEC's Division of Corporation Finance recently released Compliance and Disclosure Interpretations (“C&DIs”) regarding its interpretations of Regulation Crowdfunding.

While C&DIs are not rules, regulations, or statements of the Commission, they are a helpful insight into how the staff of the Commission views the law.  

Many of the C&DIs deal with the rules governing advertising. This is not surprising because Regulation CF's rules on advertising are not intuitive for most business people.

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Top Tips for Crowdfunding Campaigns under Title III of the JOBS Act

Posted In Crowdfunding, SEC, Securities

I was recently asked to pull together some top tips for crowdfunding campaigns under Title III of the JOBS Act. Here are some of the top tips:

  • Find a way to tell your story – Crowdfunding investors are really looking for financial statements and revenue numbers; they can go to public companies for that. Crowdfunding investors are looking for a story that inspires them to believe that the company might be the ‘next big thing.’
  • Invest in the effort to tell your story well – Lawyers, accountants, and other professionals are indispensable when it comes to getting a company ready to sell its securities to investors. If you would not perform open heart surgery on yourself, why would you try to act as your own lawyer? If you believe that your company has the potential to be the next big thing, act like it by hiring professionals who can help you.

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SEC Publishes Investor Guide for Crowdfunding

Posted In Crowdfunding, Regulation A+, SEC, Securities

As part of its commitment to consumer education the U.S. Securities and Exchange Commission has published an Investors Guide to Crowdfunding.

Referring to the upcoming May 16, 2016, start date, the SEC's publication is in an FAQ format, hoping to address questions that investors may have by providing a guide to the SEC's crowdfunding rules under Title III of the 2012 JOBS Act: 

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Elio Motors Trades on OTC Markets

Posted In Crowdfunding, Regulation A+, SEC, Securities

Elio Motors (OTCQX: OTCM), one of the first companies to use the expanded offering potential in Regulation A+, has listed its securities for resale on the OTC QX market.

“We are proud to welcome Elio Motors, the first company to raise capital online and go public on OTCQX under the JOBS Act Regulation A+,” said Jason Paltrowitz, Executive Vice President of Corporate Services at OTC Markets Group. “OTC Markets Group welcomes innovators and entrepreneurs and is proud to offer the market of choice for the new generation of crowdfunded capital raisings. We look forward to seeing Elio Motors grow its business and its visibility with investors.”

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SEC Opens Testing Site For Crowdfund Filings

Posted In Crowdfunding

The SEC announced today that it was opening its EDGAR filing website for companies to make test filings under the SEC's new crowdfunding regulations.  

Under new SEC rules that take effect on May 16, 2016, companies will be permitted to offer and sell securities through crowdfunding. Companies seeking to conduct a crowdfunding offering using the new rules must file the required disclosures about the offering on a new Form C on EDGAR, the SEC’s electronic document filing system. Filers are now able to submit test filings on the new form. The test filings will be accepted until February 29, 2016, and are intended to help prospective issuers become more familiar with the mechanics of the filing process in advance of a crowdfunding offering.

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Elio Motors Regulation A+ Offering Effective

Posted In Crowdfunding

The Regulation A+ offering for Elio Motors has gone effective today.

Elio Motors is planning to manufacture a car with over 80 mpg with a retail sales price of less than $7,000.  

Crowdfunding Start Date

Posted In Crowdfunding

Regulation CF, the SEC's rules implementing crowdfunding under Title III of the 2012 JOBS Act, were published in the Federal Register on November 16, 2015. 

Because the effective date for Regulation CF is six months after the date of publication, the rules should go into effect on May 16, 2016.

For more information on Regulation CF and how crowdfunding under Title III of the JOBS Act will work, please refer to our White Paper


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