The SEC is not your mom
We’ve been having a lot of “why can’t we do what they are doing?” conversations recently. Potential issuers have asked: Why can’t they structure a Reg A real estate offering where the issuer invests in minority holdings in other real estate companies? Why can’t they file a 1-Z to exit the Reg A reporting system […]
No, this is not crypto!
We’ve heard from some of our clients that potential investors are getting spooked by the crypto winter and the FTX meltdown. Yes, you can invest in crypto online, just like you can invest in online exempt public offerings under Regulations A, CF and D. But that’s pretty much where the similarity ends. There are a […]
If you aren’t current in your Reg A reporting, you could still be violating securities laws even if qualified by the SEC
It’s 1-SA filing season again for Regulation A filers, and time to make some observations about the consequences of not filing. We have encountered more than three companies in the last three months that have not filed all (or in one case, any) of their ongoing filings, and yet have requalified their offerings or qualified […]
Crowdfunding annual filing season: still getting it wrong!
So May 2 marked the due date for most companies in the crowdfunding world to file their annual reports on Form 1-K or C-AR. And many companies didn’t. Do I need to remind you that in order to make an offering under either Reg A or Reg CF, if you have made offerings under that […]
Are state notice filings for Regulation A issuers still important?
One of the great benefits to issuers under the SEC’s rules for offerings under Tier 2 of Regulation A, effectively created by the JOBS Act, is the preemption of state requirements for registration of the offer and sale of securities. Known as “Blue Sky Laws”, these state specific rules added considerable cost to qualifying an […]
Criminal Proceedings Against Officers and Directors: Disclose now or wait for a conviction?
When do companies need to tell investors about criminal proceedings that allege their officers and directors have engaged in fraud? According to some state regulators, it may be sooner than companies expect. In a recent settlement, an issuer was found liable for failing to disclose in its Reg A offering the ongoing criminal proceeding involving […]
How to get sued…
If you work with us, you will hear it many times that we strongly advise against financial projections … as they can get you in trouble. However, companies always seem to want to include projections that start from zero, and grow exponentially. This type of financial projection that is untethered to reality is a primary […]
Do you really have permission to use those logos?
The Theranos jury’s fraud convictions of Elizabeth Holmes, former CEO and founder of the now defunct Theranos, Inc., should give pause to startups seeking to build their reputation by touting their relationships with other companies. In the press to find financing, it can be tempting to use the logos of other companies, especially those that […]
Trolls and touts
Well, I thought I’d better blog something before people think we’ve vanished. We’ve just been too busy. But recently something happened that tied together two previous blog posts. Trolls have become an increasing problem in the online space. The whole point of the crowdfunding regs is to give voice to the crowd, to enable retail […]
Rule 145: An issue for crowdfunding company exits
Startup investors all hope for a great “exit.” Most startups, of course, will never get to that point, but for the successful ones, the principal ways that investors get repaid for their faith in a high-growth early stage company is an eventual IPO, hopefully at a price much higher than the price they paid, or […]