The Securities and Exchange Commission released a compliance guide on Regulation A+ for small businesses last week. The guide is only useful for very sophisticated small businesses and their advisors. The compliance guide does provide some context and resources for the securities law practitioner. The guide can be found at: http://www.sec.gov/info/smallbus/secg/regulation-a-amendments-secg.shtml

Background In situations where companies are considering an investment form an institutional investor, the concept of liquidation preference will be certain to come up. The investor will want certain privileges and protections in exchange for making an investment in a start-up or early stage company. These privileges and protections can take many forms but the…

In a recent report, the Kauffman Foundation noted that bank debt was the main source of outside capital for start-ups. More specifically, small banks appeared to be best at servicing this market need. personal savings was the number one source of capital for entrepreneurs. In descending order, capital came from the following top 5 sources:…

The Federal Trade Commission recently announced a settlement of charges against a man running a crowdfunding campaign on Kickstarter. The FTC, in its first case involving crowdfunding, alleged that Mr. Chevalier used deceptive practices in offering investment in a game called the Doom That Came to Atlantic City. Apparently he raised the approximately $122,000 via…

Fads come and go and some need to go. Convertible notes are one such fad. The idea sounds great to a startup. All you have to is issue debt to investors and if you cannot pay it back at maturity your debt converts into equity. You do not have to make any payments until maturity….

The Los Angeles Business Journal Reports that UCLA Anderson Forecast shows that the tech sector is hot in several parts of Los Angeles County. The author highlights some of the challenges to more rapid growth: 1. Business friendliness 2. High cost of living 3. Inadequate human capital http://labusinessjournal.com/news/2015/jun/03/anderson-tech-sector-hot-could-be-hotter/?page=1&

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