SEC Rule 506(c) does not make soliciting investors through a database of pre-screened investors a general solicitation. If soliciting investors through these services has not been a general solicitation in the past, soliciting investors through these services (assuming they don’t change) will not be a general solicitation going forward because of the adoption of Rule […]
Solicitation
Will All Offerings Now Involve General Solicitation?
It may be virtually impossible for startups to avoid general solicitation when selling preferred stock, convertible notes or common stock. Many activities that companies are already doing constitute general solicitation. Demo Day Events are Often a General Solicitation. Companies pitch all the time at “pitch” and “demo” day events. Rule 502(c)(2) says that a pitch at […]
Is Submitting Offering Materials Through Gust/AngelList/EquityNet a General Solicitation?
SEC Rule 506(c) does not make soliciting investors through a database of pre-screened investors a general solicitation. In the past, soliciting investors through these services has not been a general solicitation. Because of the adoption of Rule 506(c) soliciting investors through these services (assuming they don’t change) will not be a general solicitation going forward. […]
What are Reasonable Steps to Verify Accredited Investors
Issuers must take “reasonable steps” to verify investors are accredited in Rule 506(c) transactions involving general solicitation. SEC Rule 506(c), which became effective Sept. 23, 2013, allows general solicitation (see related blog post What is a General Solicitation?) in connection with the offer, sale and issuance of preferred stock, convertible notes and common stock without having […]
Crowdfunding for Equity Solutions: GENERAL SOLICITATION
Perhaps it was no surprise when Mary Schapiro, Chair of the Securities and Exchange Commission, told a House subcommittee that the Securities and Exchange Commission will not meet the July 4, 2012 deadline impose under the JOBS Act to implement rules for lifting the general solicitation ban under Regulation 506, Section D. Ms. Schapiro explained […]