LexisNexis® Legal Newsroom
JOBS Act: What Matters Most for Startups and VCs

The Jumpstart Our Business Startups Act (the JOBS Act), enacted in April this year, makes a variety of significant changes to securities laws, some of which relate to early-stage entrepreneurs, startup companies and venture capitalists concerned about fund raising with respect to their portfolio companies...

SEC Misses Deadline to Issue Regulations Eliminating the General Solicitation Prohibition in Regulation D Private Placements

For startups looking to raise capital, Rule 506 of Regulation D is probably the most commonly used exemption from securities registration requirements. It allows a company to make offers and sales to an unlimited number of accredited investors[1] in order to raise an unlimited amount of money. One of...

General Solicitation of Accredited Investors in 2013?

The SEC has made official what we blogged about yesterday: Late yesterday it removed from its agenda for today's meeting the consideration of general solicitation in Rule 506 and Rule 144A offerings. The SEC also released a separate meeting notice for August 29, 2012, which states it will consider...

SEC Continues to Miss Key Deadline in Implementing JOBS Act, Drawing Ire of Congress

The JOBS Act contained two provisions that have the potential to help startups in their capital-raising efforts: (1) reform of Regulation D, which will permit more widespread solicitation of angel investors (this is also frequently referred to as the repeal of the general solicitation prohibition) and...

The SEC (Finally) Issues a Preliminary Rule for Repeal of the Regulation D General Solicitation Requirements

Yesterday, the SEC finally released its proposed rule to amend Rule 506 of Regulation D to eliminate the general solicitation prohibition for private placement offerings . As I've discussed in a previous post, the SEC's continued delays in issuing this rule has resulted in considerable frustration...

SEC Lifted Ban on General Solicitation: What Does it Mean in EB-5 Practice?

On July 10, 2013, the Securities and Exchange Commission (SEC) adopted a new rule under the JOBS Act, which repeals the prohibition on general solicitation for private securities offerings relying on Rule 506 of Regulation D exemption. This is certainly exciting progress for the capital raise in EB...

SEC Provides Interpretations on Rule 506(c)

As we’ve previously blogged , in July 2013 the SEC adopted rules that permit general solicitation and general advertising in connection with certain offerings of securities to accredited investors. Yesterday, to help the markets understand some common interpretative questions associated with these...

The SEC Will Likely Update its Definition of “Accredited Investors” Very Soon

Most of the startup capital comes from accredited investors through investments made in reliance upon Rule 506 of Regulation D . According to a study by the University of New Hampshire’s Center for Venture Research, in 2013, almost 71,000 benefited from $24.8 million in investments made by accredited...

Why You Can’t Really Include Non-Accredited Investors in Rule 506 Offerings

One common misconception I encounter among startups is the idea that companies raising capital can include non-accredited investors in Rule 506[1] offerings. While it is technically true that a Rule 506 offering may include up to 35 non-accredited investors, what is often missed is that it is not really...