The Commission extend the comment period for the Commission’s rule proposal to amendRegulation D, Form D, and Rule 156 under the Securities Act (Release No. 33-9416) for an additional period of time, such as forty-five (45) days, to provide interested persons more time to analyze the issues and prepare their comments.
Just about every startup that enters a business plan competition, takes up residence in an incubator, sets up a own website, or takes any similar public-facing action, is seeking to raise capital. Every participant in the early-stage entrepreneurial community knows this, whether or not the company explicitly states so. Startup companies seeking funding might use website pages, executive summaries submitted to business plan competitions, LinkedIn profiles of the company’s founders, Twitter feeds, and countless other kinds of “written materials” which they use to communicate with the public as well as to attract financial and strategic partners. Indeed, one likely reason for the broad bipartisan Congressional support for lifting the general solicitation ban was the very recognition that the modern-day prevalence of these multiple forms of mass communication have completely overrun archaic 1930s notions of what does and does not constitute a “general solicitation.
The SEC has requested comment on the definition of accredited investor. http://www.sec.gov/rules/proposed/2013/33-9416.pdf
This is the perfect place to make your voice hear on the issue Dan Shapiro wrote so eloquently about in TechCrunch: http://techcrunch.com/2013/08/10/startupequality-org-remove-restrictions-on-gay-investors/
See also startupequality.org.
You can submit your comments at this link: http://www.sec.gov/cgi-bin/ruling-comments?ruling=s70613&rule_path=/comments/s7-06-13&file_num=S7-06-13&action=Show_Form&title=Amendments%20to%20Regulation%20D,%20Form%20D%20and%20Rule%20156%20under%20the%20Securities%20Act
This ban on solicitation imposed via a pre-filing requirement would extend substantially longer than fifteen days, particularly for smaller businesses that have reduced access or experience with complex legal matters. If a business decides to proceed with advertising a 506 offering, it must first file an expanded Form D, which will require hiring qualified counsel and require considerable time to complete. Upon submission of a completed Form D, the issuer must then wait fifteen days prior to posting an advertisement.
Wall St. Journal
Comments so far
If the issuer verifies the accredited investor status of purchasers other than through the non-exclusive list of verification methods in Rule 506(c)(2)(ii), specify the publicly available information, documentation provided by the purchaser or third parties, or other methods used to verify accredited investor status.
Suffering is when we resist the moment.
We propose to amend Rule 507 so that, in addition to the existing disqualification from Rules 504, 505 and 506 of Regulation D that arises from a court injunction, an issuer would be disqualified automatically from using Rule 506 in any new offering for one year if the issuer, or any predecessor or affiliate of the issuer, did not comply, within the past five years, with Form D filing requirements in a Rule 506 offering; provided that such one-year period would commence following the filing of all required Form D filings or, if the offering has been terminated, following the filing of a closing amendment.