The day before Halloween the SEC gave entrepreneurs a treat by passing final rules to enact Regulation Crowdfunding. The SEC rules will allow the offer and sale of up to $1 Million of securities through crowdfunding over a 12 month period. Who is eligible? Any company except for the foregoing is eligible to use the…

Without much fanfare the legislature passed and the governor signed Assembly Bill No. 667 In October 2015. California is now at the forefront of finders laws across the U.S. The question in broad terms is how to or whether to regulate persons who assist businesses in the financing process but who do not fit in…

Market surveys and anecdotal evidence suggests that mergers and acquisitions activity has picked up over the last couple years. A stable economic climate, active private equity investors, and growth in the equity markets has provided a tailwind for these transactions. Given this climate many business owners are considering their options. Whatever form a sale takes…

Based on input from the State Bar of the California, a bill (AB 667) creating an exemption for finders within California is working its ways through the halls of Sacramento. This is a promising development in an area full of uncertainty. The SEC takes the view that stands for the proposition that anyone, person or…

Since the 19th century companies have used third parties, whether individuals or companies, in their fund raising efforts. Today, companies ranging in size from start-ups to private equity funds rely on finders to help them raise money. Overall, this has been positive for capital formation, especially on the lower end of things. Nevertheless, a minority…

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….

© 2014 Kresimir Peharda. Website created and maintained by Acumen Infotech

logo-footer