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Category Archives: Capital Raising

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More Positive Regulation A News

Posted in Capital Raising

This week, the SEC published a series of new Compliance and Disclosure Interpretations (“CDIs”) related to the newly revised Regulation A, which became effective on June 19, 2015. While many of the new CDIs addressed procedural and interpretational issues under the new rules, there was an important development that could make Regulation A that much… Continue Reading

“A-Day” has finally arrived – Reg A+ goes into effect

Posted in Capital Raising

Today is June 19th.  It is an exciting day for companies that need to raise capital because Reg A+ finally goes into effect. As a reminder, Reg A+ is a nickname for SEC Regulation A, as amended by the SEC.  Reg A has been around for many years but was rarely used because it was… Continue Reading

First crowdfunding fraud enforcement action

Posted in Capital Raising

The first enforcement action involving a crowdfunding project was recently brought by the Federal Trade Commission. It involved the development of a board game which did not go well despite a successful crowdfunding campaign. This matter is interesting and instructive not only because it is the first such case, but also because it highlights some… Continue Reading

SAFEs and KISSes – Alternative investment vehicles can help early stage companies get financed

Posted in Capital Raising

Early stage and startup companies often face difficulty in obtaining initial financing.  These companies normally do not have access to traditional venture capital, angel, or bank financing.  Even when a startup finds an investor, the company may not have the time or the funds to pursue the long and complicated negotiation and documentation process required… Continue Reading

A high mark (would you believe an A+?) for the SEC

Posted in Bob's Upticks, Capital Raising, IPOs

I’ve done my share of griping about the SEC, but credit needs to be given where credit is due. And credit is due to the SEC for adopting a new, improved version of Regulation A that has become known as “Reg A+”. (OK, we can gripe about how long it took the SEC to adopt… Continue Reading

Marketplace lending: A hot new industry looking for crowdfunding

Posted in Capital Raising

Marketplace lending surely had its day in the sun in 2014.  Peer-to-peer lending, which now goes by the term marketplace lending, took a big step forward last year.  We saw the IPO of Lending Club rocket in its first day of trading on December 11, 2014 by first pricing above the range at $15 per… Continue Reading

No more secret identities: Broker-dealers may soon be required to identify beneficial owners of legal entity customers

Posted in Capital Raising

As we blogged about in May, the Bank Secrecy Act (“BSA”), which requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering, applies to entities that we may not traditionally think of as “financial institutions,” including securities broker or dealers. Compliance with the BSA is no easy… Continue Reading

Alibaba’s record IPO – How will it affect U.S. technology companies?

Posted in Capital Raising

On September 19, Chinese e-commerce giant Alibaba completed the initial public offering of its stock. The underwriters for the offering subsequently exercised their option to buy additional shares, making this the largest IPO in history at $25 billion. The stock’s price immediately jumped by a huge amount, finishing its first day of trading at $93.89,… Continue Reading

The JOBS Act – Any results yet?

Posted in Capital Raising

President Obama signed the JOBS Act into law on April 5, 2012 amid much fanfare and optimism. Small and medium sized fast-growing technology companies and their executives were especially sanguine about this new act as it appeared that it would provide access to much-needed additional expansion capital. These companies were still reeling from the recession… Continue Reading

Accredited investors – potential changes and some helpful guidance

Posted in Capital Raising

  Potential Changes. Accredited investors have long been critical participants in private financing transactions, and the success of most private financings is largely determined by the participation of these investors and the availability of their capital. State and Federal securities laws have been written or amended to foster and facilitate investment by these accredited investors. Based… Continue Reading

States take the lead on crowdfunding

Posted in Capital Raising

The JOBS Act’s crowdfunding provisions were once one of the most eagerly anticipated items contained in that Act. Many companies and their advisors had high hopes that these crowdfunding provisions would open up new arenas for financing smaller companies while easing the costs and challenges associated with securities regulatory compliance. These hopes and dreams have… Continue Reading

Don't cross the border!: Intrastate offering exemption still not useful despite new interpretations

Posted in Capital Raising

Last week, the SEC issued three new interpretations related to the so-called “intrastate offering exemption,” which is a registration exemption that facilitates the financing of local business operations.  An intrastate offering is exempt because it does not involve interstate commerce, and is therefore, outside the scope of the Securities Act. We have received a few… Continue Reading

Don’t cross the border!: Intrastate offering exemption still not useful despite new interpretations

Posted in Capital Raising

Last week, the SEC issued three new interpretations related to the so-called “intrastate offering exemption,” which is a registration exemption that facilitates the financing of local business operations.  An intrastate offering is exempt because it does not involve interstate commerce, and is therefore, outside the scope of the Securities Act. We have received a few… Continue Reading

Regulation A+: Last gasp of the JOBS Act

Posted in Capital Raising

The Jumpstart Our Business Startups (JOBS) Act was enacted on April 5, 2012 with much fanfare and high expectations. The JOBS Act was designed, in part, to help “Emerging Growth Companies” (annual revenues less than $1 billion) gain greater access to growth capital while reducing regulatory restrictions, compliance requirements, and costs. The JOBS Act was… Continue Reading

SEC provides guidance for new Rule 506 offerings

Posted in Capital Raising

As more and more companies take advantage of the SEC’s recent rule change allowing general solicitation and advertising in private offerings, lots of interpretative questions on how to apply the new rules have arisen.  Over the course of the last couple of months, the Staff at the SEC has provided some guidance on some of… Continue Reading

The SEC gets an A+ with the proposed “Regulation A+” rules

Posted in Capital Raising

One of the most anticipated items from the JOBS Act enacted in April 2012 was the so-called Regulation  A+ –  a new and improved exemption that would allow issuers to raise up to $50 million in a 12-month period through a “mini-registration” process that is similar to that of rarely used Regulation A exemption. On… Continue Reading

The FDIC should consider updating its outdated statement of policy on bank stock offerings

Posted in Capital Raising, Financial Institutions

With the costs of compliance on the rise, we are seeing some significant consolidation in the banking industry, particularly among community banks. In a recent article on www.bankdirector.com, Rick Maroney writes that although bank M&A has been tepid thus far in 2013, some key drivers of M&A activity are starting to emerge and he predicts… Continue Reading

Proposed changes to Regulation D: Are these really so bad?

Posted in Capital Raising

On the same day that the SEC proposed rules that may make capital raising easier for companies by repealing the ban on general solicitation for private offerings, the SEC also proposed rules that may make it much more difficult to raise capital.  Why would they do this?  The repeal on the ban on general solicitation… Continue Reading

Avoiding five potential traps in “new” Rule 506 offerings

Posted in Capital Raising

As we previously blogged about, the SEC finally adopted final rules to remove the ban on general solicitation and advertising in Rule 506 offerings.  The removal of the ban is a huge change in the way private offerings may be conducted and welcome relief to the thousands of issuers each year who have tapped out… Continue Reading

Removal of ban on general solicitation and advertising won’t be a license for issuers to say anything they want

Posted in Capital Raising

Although the SEC recently finalized rules that will remove the ban on general solicitation and advertising for certain private offerings under Rule 506 of Regulation D, it does not mean that issuers will have free reign and complete discretion over their use of advertisements. That is, issuers looking to locate potential investors through advertising after… Continue Reading

By removing ban on general solicitation SEC finally moves the JOBS Act forward

Posted in Capital Raising

The SEC issued Final Rules last week that effectively eliminate the ban on the use of general solicitation and general advertising in connection with certain securities offerings performed under Rule 506 of Regulation D. This is a major shift that will allow issuers to use general solicitation and advertising to promote certain private securities offerings…. Continue Reading

Potential good news for growth companies: Nasdaq to set up new private market for unlisted stocks

Posted in Capital Raising, Technology Company Issues

Nasdaq OMX Group, Inc. announced today that it will enter into a joint venture with SharesPost, Inc. to form a marketplace for the trading of shares of unlisted companies. This is an interesting and cutting edge move that solves some problems for both Nasdaq and SharesPost. This new marketplace should be very positive for rapidly… Continue Reading

SEC curtails JOBS Act broker registration exemption in recent FAQs

Posted in Capital Raising

I understand that the SEC needs to balance having efficient markets and facilitating capital formation with the protection of investors, but sometimes erecting roadblocks with the intent of protecting investors is merely regulation for regulation’s sake.  On February 5, 2013, the Staff of the Division of Trading and Markets of the SEC provided guidance on… Continue Reading

SEC advisory committee to recommend formation of small company securities exchange

Posted in Capital Raising

  An SEC advisory committee is likely to recommend that that the SEC support the formation of a new securities exchange designed especially for small cap and micro cap public companies. While this new exchange is a long way from approval and operation, strong SEC support could substantially increase its chances of successful implementation. This… Continue Reading