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Private Placements

Definition of Accredited Investor To Be Expanded? (Part III)

On February 1, 2016, the House of Representatives passed H.R. 2187, titled “Fair Investment Opportunities for Professional Experts Act.”[1]  The bill, whose stated purpose is to direct the SEC to revise its regulations regarding the qualifications of natural persons as accredited investors, seeks to expand the definition of accredited investor.  Specifically, the bill proposes to add non-financial measures of sophistication…

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Definition of Accredited Investor To Be Expanded? (Part II)

In our last post, we looked at the recent recommendations by the Securities and Exchange Commission’s (“SEC”) Advisory Committee on Small and Emerging Companies (the “Committee”) to expand the definition accredited investor.[1]  For those who are familiar with the Committee’s activities, this was not the first time it recommended expanding the definition of accredited investor.  In March 2015, for example,…

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Definition of Accredited Investor To Be Expanded? (Part I)

In our previous blog post Raising Capital Through Exempt Offerings, we talked about some of the most commonly used exemptions for securities offerings.  Of note, we mentioned that Rule 506 promulgated under Regulation D is the most widely used transactional exemption for securities offerings, used in more than 90% of all exempt offerings in the United States.[1]  To understand how…

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When Do You Need Securities Law Advice?

Startups and early-stage companies often ask us when they need securities law advice (other than when obviously dealing with securities).  Our answer is: as soon as you start thinking about raising capital or bringing in investors.  Here’s why. Under the federal securities laws, a company may not offer or sell securities unless the offering has been registered with the SEC…

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Shawn McBride Featured in a Huffington Post Article on Crowdfunding

On June 23, 2016, Shawn McBride was featured in a Huffington Post article titled “What the New Equity Crowdfunding Rules Mean for Business Owners and Investors.”  This article is based on the podcast interview with Deirdre Sanborn of The Ambition Project Show on the same subject, which we blogged about just this past week (here). The Huffington Post article focuses…

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Shawn McBride Talks About Crowdfunding on the Ambition Project Show

What the New Equity Crowdfunding Rules Mean for Dallas Business Owners and Investors. On June 22, 2016, Shawn will be featured in a podcast interview with Deirdre Sanborn of the Ambition Projects Show.  In this interview, Shawn talks about what the new federal crowdfunding rules mean for small Dallas business owners and investors. Click here to listen to the podcast.…

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Federal Crowdfunding Goes into Effect on May 16, 2016 (Part VI)

Fix Crowdfunding Act.   We have been blogging about federal crowdfunding in this blog series this past month or so. As you know, Title III of the JOBS Act, also referred to as the “CROWDFUND Act (Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012),” exempts up to $1 million crowdfunded securities from the federal registration requirement when…

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Federal Crowdfunding Goes into Effect on May 16, 2016 (Part V)

SEC Small Entity Compliance Guide and Compliance and Disclosure Interpretations for Issuers. On May 13, 2016, the Securities and Exchange Commission (“SEC”) released two guidance documents on crowdfunding for issuers: “Regulation Crowdfunding: A Small Entity Compliance Guide for Issuers” and “Regulation Crowdfunding: Compliance and Disclosure Interpretations (C&DIs).” [1]  For details of the final rules, including requirements for issuers, please see…

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Federal Crowdfunding–Finally Here–Goes into Effect on May 16, 2016 (Part IV)

FINRA’s Funding Portal Rules. The federal crowdfunding final rules require that each intermediary in a crowdfunding transaction be registered with the Securities and Exchange Commission (“SEC”) either as a broker-dealer or a funding portal and be a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), which is currently the only registered national securities association. For details of the final…

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Federal Crowdfunding–Finally Here–Goes into Effect on May 16, 2016 (Part III)

SEC: A Small Business Compliance Guide on Registration of Funding Portals. On February 29, 2016, the Securities and Exchange Commission (“SEC”) issued “A Small Entity Compliance Guide: Registration of Funding Portals.” [1] The full text of the investor bulletin is available here. One of the requirements for crowdfunding under JOBS Act is that it be done through an intermediary; no…

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