Angel Investors Share Concerns With SEC Ahead Of General Solicitation

Angel Investors Share Concerns With SEC Ahead Of General Solicitation

inShare6September 19, 2013 @ 10:18 am By

securities and exchange commission secYesterday the SEC held a meeting of top advisors and staff to discuss the latest rulemakings and initiatives from within the Commission. The Angel Capital Association was invited to speak on a new rule to go into effect on September 23rd that lifts the ban on general solicitation for private placement offerings under new Rule 506(c) of Regulation D.

Angel investors have been vocal about their concerns regarding certain elements of this new rule…

The SEC needs to recognize the power of angels, and the value chain of funding a company from startup to successful exit. The SEC needs to protect angels with safe harbors against 506c. The SEC needs to continue preserving the self-certification of accreditation in 506b. And the SEC needs to maintain the current levels of income and wealth for accreditation without onerous and unnecessary requirements – including third parties. Only these actions will allow the Jumpstart Our Business Startups (JOBS) Act to achieve its intended goals – to make it easier for companies to gain funding, and create more high paying jobs.David Verrill, WSJ Op-Ed, July 2013

acaSelf accreditation provides a fast and easy way for angel investors to self-certify without having to expose specifics regarding their income and/or net worth. At one point some within the ACA were calling this verification standard an “angel killer,” but that stance has since softened based on language in the rule allowing for “principles-based verification.” The ACA has issued their own guidance on verification standards.

The topic of pitch events was also discussed prominently, as William Carlton explained on his Counselor @ Law blog

The most dramatic moment of the meeting yesterday was when Catherine Mott, a member of the advisory group, former Chair of the ACA, and angel investor, asked the staff whether demo days and pitch events – common features of today’s startup financing ecosystem, ostensibly okay in the past under old 506 – constituted general solicitation.

This issue will resonate deeply with the startup community, many of whom have arguably been generally soliciting their offerings for years via various demo days and pitch events. This exact issue was recently included in a notice filed against Candace Klein by the State of Ohio, a move that seemed unfair considering the proliferation of these types of activities within the greater startup ecosystem. It led Charles Sidman to question whether the State of Ohio was participating in “selective enforcement.”

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First Silicon Crowdfund Valley Conference

indexover_01We invite you to the First Silicon Crowdfund Valley Conference which will bring together traditional private investors and crowdfunders. SVCrowdfund provides the participants with the unique opportunity to discuss current state of the industry, to learn from experts in venture capital, business angel and crowdfunding fields, to network and find new partnerships.

The Conference is held on April 4th – 5th, 2013 to celebrate the first anniversary of the JOBS Act signed by President Obama last year. You will hear from people who implement crowdfunding as a part of their current fundraising and marketing strategies and from those who work with SEC to make the equity crowdfunding legal in the United States.

Complete Conference program is being currently finalized and will be available on the website by the middle of February. If you want to get involved as a speaker, sponsor, vendor, advertiser or a volunteer, don’t hesitate to contact us!

Who will benefit from participating in SVCrowdfund?

  • Private investors (VCs and Business Angels) who want to learn about the opportunities crowdfunding creates for them
  • Startups and innovators examining their fundraising options
  • Crowdfunding platforms wanting promote their portals in the capital of innovation and private investments
  • Marketing Specialists, Legal Advisors, CPAs looking for new clients and partners
  • Students interested in getting involved in private investment or marketing business; or thinking about financing their new venture
  • Journalists and business bloggers searching for worthy topics
  • Anyone who is considering supporting crowdfunding projects or investing in businesses through crowdfunding

If you belong to one of these categories, join us at the SVCrowdfund!

Silicon Valley Meets Crowdfunders

CrowdFunding Conference | Thursday April 4 – Friday April 5, 2013 | Sheraton Hotel, Palo Alto, Ca

Forbes Article On Crowdfunding Explosion in 2013

Read this article on Forbes today. Very well written and accurate:

The world of entrepreneurial finance is changing rapidly; we are at a tipping point that will make what seems like a vibrant part of our global economy today seem small in one year’s hindsight.

Whether you are a service provider, social entrepreneur, angel investor, venture capitalist, or one of the millions of people ready to become a small-scale start up financier, it is time to pay attention.

Estimates for annual crowdfunding transactions go as high as $500 billion annually compared to 2011’s $1.5 billion (anticipated to be $3 billion in 2012).  If crowdfunding even begins to approach that scale, it will completely change the landscape for start-up financing.

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