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Offerings: Traditional Regulation D

Delivering All Things Crowdfunding and Online Investing

December 19, 2016 by Sara Hanks
If you raise capital online, you're probably a New Economy, Internet 4.0 type of company, right? Leverage the cloud, move fast, break rules (not securities rules), create synergies, it's all about the hustle. Right? Maybe. Some of you new era companies should be huddling in your hoodies for shame, 'cos some of you have distinctly old school bylaws when it somes to stock certificates. Yes, stock certificates. Those bits of paper with incomprehensible things written on them that say who owns shares in your company. Some of you still have bylaws that say that paper stock certificates MUST be issued. And you are engaging great new transfer agents who do everything...
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September 24, 2015 by Andrew Hanks
Thomson Reuter's Practical Law interviews CrowdCheck CEO Sara Hanks  on trends in equity crowdfunding and key issues for companies considering a crowdfunding offering.   Expert Q&A on Equity Crowdfunding
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September 27, 2013 by Sara Hanks
Exciting times, eh? With the lifting of the ban on “general solicitation” for offerings to accredited (rich) investors, all sorts of great start-up companies are advertising for investors. Who knew there were that many organic ice cream companies out there? So accredited investors looking to invest small amounts to boost America’s small businesses are able to see all sorts of investment opportunities, and many different online platforms are being stood up to showcase these opportunities. But investors need to know the difference between the types of platforms, because different platforms have different obligations, which an investor might think are important in...
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September 14, 2012 by Sara Hanks
One aspect of US securities laws that frequently trips up the unwary is the fact that US law regulates both the offer and the sale of securities. This is unlike most other securities regulation regimes, and it seems counterintuitive to most folks. After all, if you offer securities in a way you shouldn’t have and no-one buys anything, no harm, no foul, right? Sorry, that’s not the way it works. To make it even worse, “offer” has a special meaning in Securities World. You might think an offer is something like “Would you like to buy my Preferred Shares at $100 each?” Most normal people would, but sorry, wrong again. So let’s back way up to basics. The...
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September 05, 2012 by Brian Knight
The SEC released a proposed rule (Look for Release #33-9354), pursuant to Title II of the JOBS Act that will lift the ban on general solicitation for accredited investor only Regulation D raises. We have done an analysis memo of the proposed rule, and compared Regulation D to Title III investment crowdfunding. Check out the link below to get to the memo. CrowdCheck Memo on New Reg D
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August 29, 2012 by Sara Hanks
After months of delay and some drama, the Securities and Exchange Commission voted today to propose for public comment rules establishing a new type of offering that is not required to be registered with the SEC. New Rule 506(c) would permit any size of offering to be made using any form of “general solicitation or general advertising” (TV, newspaper ads, online) providing that only accredited investors were permitted to invest. This change was dictated by Title II of the JOBS Act, which directed the SEC to lift the prohibition on general solicitation in Rule 506, provided that all purchasers of the securities were accredited investors and the issuer took “...
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August 02, 2012 by Sara Hanks
It’s frustrating. We are all so ready to do crowdfunding. But we have to wait till the SEC and FINRA come up with their rules. Some US companies can’t wait and they have gone off to seek their fortunes (or at least funding) on foreign crowdfunding portals. Companies thinking of following them should make sure they have all their ducks in a row before they do so. Warning: this is where things get seriously technical. But it’s important. If you have questions you should talk to a securities lawyer. Section 5 of the Securities Act of 1933 says that if you sell securities to the public* using the “jurisdictional means” you have to register that offering with...
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July 16, 2012 by Brian Knight
When I get an article sent to me once I generally read it, when I get it sent to me twice, by two separate people, weeks apart, I know I had better read it closely. “The Road to Crowdfunding Hell” by Daniel Isenberg is just that sort of article. Isenberg, a professor of entrepreneurship practice and director of the Babson Entrepreneurship Ecosystem Project (BEEP), as well as a VC and angel investor, is clearly someone whose opinion needs to be taken seriously. His opinion is that equity crowdfunding is not likely to be good for investors. In reading the article I had to admit that a lot of what he was saying could not be dismissed as so much doom-saying; he...
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