Raising Capital

Investor Qualification. Each time before accepting any investment commitment, an intermediary must have a reasonable basis for believing that the investor satisfies the investment limitations discussed above; in doing so, an intermediary may rely on an investor’s representations concerning the investor’s annual income, net worth, and the amount of the investor’s other investments made under the crowdfunding exemption, unless the…

Funding Portal Registration. As expected, a funding portal must register with the SEC by filing a complete Form Funding Portal (to be amended whenever previously submitted information becomes inaccurate) and become a member of a national securities association[1]; a funding portal that is registered this way is exempt from the broker registration requirements.[2] A non-U.S. portal can register, too, but…

Intermediaries. All crowdfunding must be done through an intermediary. No issuer can do crowdfunding directly without hiring one. The Act imposes various requirements on crowdfunding intermediaries.[1] For starters, intermediaries have to register with the SEC as a broker or as a funding portal and become a member of a national securities association.[2] Under the final rules, intermediaries would also have…

Disclosure Requirements. Under the final rules, an issuer must file with the SEC and provide to the relevant intermediary and investors a Form C: Offering Statement, prior to the commencement of the offering of securities and amend the same to disclose any material changes, additions or updates.[1] The final rules set forth information that needs to be included in Form…