Watch Out For Oregon’s Securities Laws

On By crowdfundattnyIn Securities LawsLeave a comment

Oregon is a beautiful state and its people among the friendliest and most caffeinated in the country. But watch out for its securities laws.

A New York law firm found out the hard way in a case called Houston v. Seward Kissel, LLP. The firm prepared offering documents for a company that was later sued by an Oregon investor claiming fraud. The unhappy investor sued the law firm under ORS 59.115(3), which imposes liability on anyone who “participates or materially aids” in the sale of a security. The judge allowed the case to go forward without even requiring the plaintiff to show the law firm knew about the alleged fraud. 

In another case under the same statute, Ainslie v. Spolyar, the court granted summary judgment against a junior associate in a law firm that prepared offering documents, where the issuer allegedly violated the terms of the offering documents.

How dare they sue lawyers!

But lawyers aren’t the only ones potentially on the hook. Other potential targets include finders, agents, funding portals, accountants, financial advisors, employees of the issuer, even banks that extend financing to investors. If you touch the offering, you’re potentially liable. And under the statute, everyone is “jointly and severally” liable, meaning everyone, even the lowly associate in Ainslie v. Spolyar is liable for 100% of the damages.

The only defense is to show that you didn’t know of the facts underlying the claim (e.g., the fraud or violations of Oregon’s securities laws) and couldn’t have known of them “in the exercise of reasonable care.” That’s a very tough burden for two reasons:

  • Suppose the issuer has committed fraud. Proving that you didn’t know about it is one thing. Proving that you couldn’t have discovered it is extremely difficult because there it is, in broad daylight today.
  • Because the burden is on the defendant, these cases will rarely be dismissed on summary judgment. That means you’re in for a long, expensive fight.

The Oregon statute doesn’t matter too much for issuers because issuers are always liable for fraud and other wrongdoing and know all the facts. But for third parties, including websites and funding portals, at least consider excluding Oregon investors from your offerings, if possible.

Questions? Let me know. 

WATCH OUT FOR RULE 10b-9 IN CROWDFUNDING OFFERINGS

Watch Out For Rule 10b-9 In Crowdfunding Offerings

On By crowdfundattnyIn Crowdfunding Offerings4 Comments

Section 10(b) of the Exchange Act prohibits use of “any manipulative or deceptive device or contrivance” in connection with the purchase or sale of a security.

The SEC has issued several regulations under section 10(b), prohibiting deceptive practices in various specific circumstances. By far the best-known and most-feared is 17 CFR §240.10b-5, aka Rule 10b-5, which makes it unlawful:

  • To employ any device, scheme, or artifice to defraud,
  • To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and
  • To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

But Crowdfunding issuers and funding portals should know about another regulation issued by the SEC under section 10(b), Rule 10b-9.

On its face Rule 10b-9 is straightforward. It says (I’m paraphrasing) that if you set a minimum amount for an offering and don’t reach the minimum, you have to return everyone’s money. 

Back in the old days, pre-JOBS Act, when many educated Americans spoke a dialect that rarely included the phrase “100%,” almost every offering had a stated minimum. For example, say a developer wanted to buy a multifamily project for $5M, of which $3.5M would be financed and $1.5M would be raised as equity. In her equity offering the developer would state $1.5M as the minimum raise because without the full $1.5M the deal isn’t viable. If she didn’t raise the full $1.5m by the deadline everyone who had invested would get their money back.

Pretty simple, right?

Now suppose that the developer is three days from her deadline and has raised $1,490,000. To meet the $1.5M minimum she writes a $10,000 check herself. 

Under the language of Rule 10b-9 itself, as well as early SEC interpretations of the rule, that should be fine. The developer has reached the $1.5M minimum, albeit with $10,000 of her own money, so the project is viable and investors are getting the economic deal they thought they were getting.

But in a case called SEC v. Blinder, Robinson & Co., Inc. the court discovered a different rationale for Rule 10b-9. The purpose wasn’t just to ensure an offering was fully funded, but also to assure each investor that others had made the same investment decision:

“Each investor is comforted by the knowledge that unless his judgment to take the risk is shared by enough others to sell out the issue, his money will be returned.”

This language, which implicitly appealed to the “wisdom of the crowd” long before Crowdfunding was a thing, is now cited by the SEC, FINRA, and other courts interpreting Rule 10b-9.

Now we see the developer’s $10,000 investment in a different light. She wrote the $10,000 check not because she’s willing to take the same economic deal as other investors but because she’s entitled to fees from the deal and this is her livelihood. No other investors can take comfort from that!

If this is true for a multifamily real estate project it is true many times over for the local brewery raising money using Reg CF. Although Alfred is unrelated to the founder of the brewery, he invested mainly because he likes getting free beer on Thursday nights – one of the perks – and enjoys the comradery, not because he’s expecting a great financial return. No investor can take comfort from that! 

With little better to do, lawyers worry about this kind of thing. Although I think the risk of enforcement action by the SEC is small, out of an abundance of caution I would consider two disclosures in every offering:

  • A disclosure that investments made by the sponsor and its affiliates will count toward the offering minimum (the “target offering amount” in Reg CF); and
  • A disclosure that investors shouldn’t take comfort from investments made by others.

This is what makes the list of Risk Factors so long:  we keep adding things and rarely take anything out.

100%

Questions? Let me know. 

Don't Use Lead Investors and Proxies in Crowdfunding Vehicles

Don’t Use Lead Investors And Proxies In Crowdfunding Vehicles

On By crowdfundattnyIn Crowdfunding, Crowdfunding Vehicles2 Comments

Some high-volume portals use a crowdfunding vehicle for every offering, and in each crowdfunding vehicle have a “lead investor” with a proxy to vote on behalf of everyone else. This is a very bad idea.

Lead investors are a transplant from the Silicon Valley ecosystem. Having proven herself through  successful investments, Jasmine attracts a following of other investors. Where she leads they follow, and founders therefore try to get her on board first, often with a promise of compensation in the form of a carried interest.

A lead investor makes sense in the close-knit Silicon Valley ecosystem, where everyone knows and follows everyone else. But like other Silicon Valley concepts, lead investors don’t transplant well to Reg CF – like transplanting an orange tree from Florida to Buffalo.

For one thing, Reg CF today is about raising money from lots of people who don’t know one another and very likely are making their first investment in a private company. Nobody is “leading” anyone else.

But even more important, giving anyone, lead investor or otherwise, the right to vote on behalf of all Reg CF investors (a proxy) might violate the law. 

A crowdfunding vehicle isn’t just any old SPV. It’s a very special kind of entity, created and by governed by 17 CFR § 270.3a-9. Among other things, a crowdfunding vehicle must:

Seek instructions from the holders of its securities with regard to:

  • The voting of the crowdfunding issuer securities it holds and votes the crowdfunding issuer securities only in accordance with such instructions; and
  • Participating in tender or exchange offers or similar transactions conducted by the crowdfunding issuer and participates in such transactions only in accordance with such instructions.

So let’s think of two scenarios.

In one scenario, the crowdfunding vehicle holds 100 shares of the underlying issuer. There are 100 investors in the crowdfunding vehicle, each owning one of its shares. A question comes up calling for a vote. Seventy investors vote Yes and 30 vote No. The crowdfunding vehicle votes 70 of its shares Yes and 30 No.

Same facts in the second scenario except the issuer has appointed Jasmine as the lead investor of the crowdfunding vehicle, with a proxy to vote for all the investors. The vote comes up, Jasmine doesn’t consult with the investors and votes all 100 shares No.

The first scenario clearly complies with Rule 3a-9. Does the second?

To appreciate the stakes, suppose the deal goes south and an unhappy investor sues the issuer and its founder, Jared. The investor claims that because the crowdfunding vehicle didn’t “seek instructions from the holders of its securities,” it wasn’t a valid crowdfunding vehicle, but an ordinary investment company, ineligible to use Reg CF. If that’s true, Jared is personally liable to return all funds to investors.

Jared argues that because Jasmine held a proxy from investors, asking Jasmine was the same as seeking instructions from investors. He argues that even without a crowdfunding vehicle – if everyone had invested directly – Jasmine could have held a proxy from the other Reg CF investors and nobody would have blinked an eye.

When the SEC issues a C&DI or a no-action letter approving that structure, terrific. Until then I’d recommend caution.

Questions? Let me know. 

Startups

Startup Founders Don’t Need To Make A Section 83(b) Election

On By crowdfundattnyIn Crowdfunding, Startups2 Comments

A bunch of websites, including websites of large law firms, advise startup founders to make an election under section 83(b) of the Internal Revenue Code. They shouldn’t have relied on ChatGPT! For almost all startups and almost all founders, a section 83(b) election is unnecessary and foolish.

Section 83 is captioned “Property Transferred in Connection with Performance of Services.” Section 83(a) states the general rule:  if you receive any kind of property in exchange for performing services you have to pay tax on the value of the property. The property could be anything, an old car, a 17th Century Chippendale cabinet, Bitcoin, but in the world of startups the property is usually company stock.

Under section 83(a), if you’re hired as the CTO of Startup, Inc. and receive 10,000 shares of Startup, Inc.’s stock as as part of your compensation package, worth $1.00 per share, Box 1 of your W-2 will include that $10,000 of value, along with your very modest cash salary.

When startups hire CTOs and other service providers, they structure the compensation package so the CTO will stick around. Typically, Startup, Inc. would give you the 10,000 shares today but provide that they “vest” in four tranches, 2,500 today, 2,500 at the end of the first year, 2,500 at the end of the second year, and 2,500 at the end of the third year. If you leave at the end of the second year you own 7,500 shares while the other 2,500 shares disappear.

Section 83(a) says you don’t pay tax on the shares until they vest. So you’d pay tax on the first 2,500 shares this year, then pay tax on the second 2,500 shares next year, and so forth. That’s great! You don’t have to pay tax on the property you receive until it’s vested or, in tax code parlance, until it is no longer “subject to a substantial risk of forfeiture.” 

That’s very fair but in the startup world there’s a downside. You think the shares of Startup, Inc. are worth $1.00 today but you hope they’ll be worth way more in the future – that’s the whole point of the startup. And while section 83(a) allows you to postpone paying tax until your shares vest, the flip side is you pay tax on the value at the time they vest. If the shares are worth $1.00 today you pay tax on $2,500 this year. But if they’re worth $1.65 next year you pay tax on $4,125. And if they’re worth $3.30 the year after you pay tax on $8,250, up and up.

That’s where section 83(b) comes in.  By filing a piece of paper with the IRS – the section 83(b) election – you can choose to pay tax on all the shares today, even on the shares that aren’t yet vested, at their current value, rather than paying tax on the value in the future.

You’re making a bet. If you’re confident the company will succeed, you choose to pay tax on $10,000 today even though you don’t really own all the shares and only have to pay tax on $2,500, hoping to save a lot of tax in the future. If the company fails you lose your bet:  you’ve paid tax on $10,000 of shares that weren’t really worth anything. 

As you might have noticed already, the whole scenario has nothing to do with founders, for two obvious reasons:

  • Leah, the founder of Startup, Inc. didn’t receive her stock by promising to perform services in the future. She received her stock because she formed the company. She transferred to the company the idea for the business, her marketing plans, a little cash, a contract with her first customer, maybe some computer code or other property. In tax parlance she contributed the goodwill.
  • Leah didn’t make her own stock “subject to a substantial risk of forfeiture”! She formed the company and issued all the stock to herself. Period.

For those of you keeping track, the issuance of stock to Leah by her company was tax-free under section 351 of the Code because she owns more than 80%.

The situation I just described is true of about 99.8% of startups. In the other .02% of cases, perhaps a founder teams up with an investor before forming her company and agrees that some of her stock is subject to a vesting schedule. In those cases, and only in those cases, would section 83(b) be relevant.

If your main challenge as a founder is you don’t have enough stuff to file with the IRS, go ahead and file a section 83(b) election even though it’s unnecessary and meaningless. Otherwise spend your time on something else.

Be careful what you read on the internet!

Questions? Let me know. 

Why I’m Grateful This Thanksgiving

On By crowdfundattnyIn Uncategorized4 Comments

My 10th-great grandfather was William Bradford, the leader of the Pilgrims. I’m grateful that he and his band of religious refugees made the trip and were saved from starvation by the native population.

I’m grateful for the wisdom of the American people and the resilience of their institutions.

I’m thankful for a culture that rewards risk-taking and innovation and that is slowly, haltingly, inexorably freeing itself of the prejudices of our collective past.

I’m grateful for American entrepreneurs who endlessly question the present and invent the future.

I’m grateful I didn’t invest with FTX.

I’m grateful – I’m not joking – to the SEC for providing oversight for the most complex, dynamic, trusted capital markets in the world.

I’m grateful to my colleagues at Lex Nova Law for helping to build a flexible, modern law firm.

I’m grateful to live in a diverse, changing, sometimes-chaotic country where it often seems we disagree about everything (we don’t). Like others, I worry that so many Americans have chosen alternative realities and conspiracy theories, but I have faith that these afflictions, like others in our history, will prove temporary.

I’m grateful that during my own midlife crisis I wasn’t on Twitter.

I’m grateful for Anthony Fauci, an ordinary American who rose to the moment and became extraordinary.

I’m grateful to participate in the fundamental rethinking of capitalism called Crowdfunding, making capital available where it has never been available before and making great investment opportunities available to more and more Americans.

I’m grateful to everyone in the Crowdfunding ecosystem, especially to Doug Ellenoff and others who worked to make the JOBS Act a reality.

I’m grateful to Ukraine and its brave people, who are giving the world a lesson in the power of freedom.

I’m grateful for my clients, a diverse, energetic, endlessly-creative group of entrepreneurs who are making America better and in the process making my life infinitely more rewarding.

Yesterday six Americans were killed in a shooting in Virginia. That follows four in Oklahoma on Sunday, five in Colorado on Saturday, and all the rest. Next year I hope I can be grateful that we have finally begun to address the uniquely American plague of violence.

Thanks for reading everyone! I hope you enjoy your Thanksgiving as much as I intend to enjoy mine. As always, contact me if you have any questions.

What eBAY Tells Us About Secondary Markets For Private Companies

On By crowdfundattnyIn Blockchain Technology, Private Companies, Private Securities1 Comment

The securities of private companies are illiquid, meaning they’re hard to sell.

Since 2017 I’d guess a billion dollars and a million person-hours have been spent by those who believe blockchain technology will create liquidity for private securities. Joining that chorus, a recent post on LinkedIn first noted that trillions of dollars are locked up in private securities, then claimed that blockchain technology (specifically, the technology created by the company posting) could unlock all that value.

This is all wrong, in my always-humble opinion. All that money and all those person-hours are more or less wasted.

My crystal ball is no clearer than anyone else’s. But when I try to believe that blockchain will create active secondary markets I run up against two facts:

  • Fact #1: Secondary markets for private securities have been perfectly legal in this country for a long time, yet there are very few of them.
  • Fact #2: The New York Stock Exchange and other exchanges around the world were vibrant even when they were using little slips of paper.

Those two things tell me that it’s not the technology that creates an active secondary market and hence that blockchain won’t change much.

An active secondary market is created when there are lots of buyers and lots of sellers, especially buyers. When millions of people wanted to buy Polaroid in the 1960s they didn’t care whether Polaroid used pieces of paper or stone tablets. Conversely, put the stock of a pink sheet company on a blockchain and you won’t increase the volume.

As described more fully here, there are a bunch of reasons why there aren’t lots of potential buyers for a typical private company:

  • It probably has a very limited business, possibly only one product or even one asset.
  • It probably has limited access to capital.
  • It probably lacks professional management.
  • Investors probably have limited voting rights.
  • There are probably no independent directors.
  • Its business probably depends on one or two people who could die or start acting like Elon Musk.
  • Insiders can probably do what they want, including paying themselves unlimited compensation.
  • No stock exchange is imposing rules to protect investors.

All that seems obvious now and was obvious in 2017. But now I’m thinking of another company with lessons about secondary markets: eBay.

If there’s anything even less liquid than stock in a private company, it’s a used refrigerator, a bracelet you inherited from your grandmother, the clock you haven’t used for 15 years.

All those things and thousands more were once completely illiquid and therefore worth nothing. eBay changed that, almost miraculously adding dollars to everyone’s personal balance sheet. Just as every ATS operating today seeks to create an active market for securities, eBay created a market for refrigerators, bracelets, and clocks. Quite amazing when you think about it.

eBay didn’t create the market by turning refrigerators, bracelets, and clocks into NFTs. To the contrary, when you sell something on eBay you have to ship it, physically, using the lowest of low technology. eBay created the secondary market simply by connecting buyers and sellers using Web2. Just like another company that has created a pretty active market, Amazon.

If any ATS operating today had a thousandth of the registered users eBay has, its founders and investors would be even rubbing their hands with glee.

As a Crowdfunding advocate, I wonder what the world would look like if all those dollars and person-hours had been spent improving the experience of initial investors rather than pursuing secondary markets and blockchain, things dreams are made of. As the shine comes off blockchain maybe we’ll find out.

Questions? Let me know. 

Title III Crowdfunding

When Should A Crowdfunding SAFE Or Convertible Note Convert?

On By crowdfundattnyIn Convertible Note, SAFELeave a comment

Convertible notes and SAFEs often make sense for startups because they don’t require anyone to know the value of the company. Instead, the company and early investors can piggyback on a later investment when the value of the company might be easier to determine and the size of the investment justifies figuring it out.

Which raises the question, when should the convertible note or SAFE convert?

In the Silicon Valley ecosystem that’s an easy question. Per the Y Combinator forms, a convertible note or SAFE converts at the next sale of preferred stock, which necessarily involves a valuation of the company.

That works in the Silicon Valley ecosystem because (i) in the Silicon Valley ecosystem investors always get preferred stock, and (ii) the Silicon Valley ecosystem is largely an old boy network where founders and investors know and trust one another.

As I’ve said before, the Crowdfunding ecosystem is different. There are at least two reasons why the Y Combinator form doesn’t work here:

  • For a company that raises money with a SAFE in a Rule 506(c) or Reg CF offering, the next step might be selling common stock (not preferred stock) in a Regulation A offering. The SAFE has to convert.
  • Say I’ve raised $250K in a SAFE and think my company is worth $5M. If I’m clever, or from Houston*, I might arrange to sell $10,000 of stock to a friend at a $10M valuation, causing the SAFEs to convert at half their actual value. All my investors are strangers so I don’t care.

Which brings us back to the original question, what’s the right trigger for conversion?

Half the answer is that it should convert whether the company sells common stock or preferred stock. 

Now suppose that I’ve raised $250K in a SAFE round. The conversion shouldn’t happen when I raise $10,000 because that doesn’t achieve what we’re trying to achieve, a round big enough that we can rely on the value negotiated between the investors and the founder. What about $100,000? What about $1M?

In my opinion, the conversion shouldn’t be triggered by a dollar amount, which could vary from company to company. Instead, it should be triggered based on the amount of stock sold relative to the amount outstanding. So, for example:

“Next Equity Financing” means the next sale (or series of related sales) by the Company of its Equity Securities following the date of issuance of this SAFE where (i) the Equity Securities are sold for a fixed price (although the price might vary from purchaser to purchaser), and (ii) the aggregate Equity Securities issued represent at least ten percent (10%) of the Company’s total Equity Securities based on the Fully Diluted Capitalization at the time of issuance.

You might think 10% is too high or too low, but something in that vicinity.

Finally, the conversion should be automatic. Republic sells a SAFE where the company decides whether to convert, no matter how much money is raised. In my opinion that’s awful, one of the things like artificially low minimums that makes the Reg CF ecosystem look bad. You buy a SAFE and the company raises $5M in a priced round. The company becomes profitable and starts paying dividends. You get nothing. You lie awake staring at your SAFE in the moonlight.

*Go Phils!

Questions? Let me know.

LLC Vs C Corporation For Startups: A Short Explanation

On By crowdfundattnyIn C corporations, LLCsLeave a comment

Like COVID, the questions around choosing a limited liability company or C corporation for startups never seem to go away.

For lots of details see the article I wrote here. Except for making you the center of attention at the party, however, those details don’t matter very much. So I’m offering this short version.

In a limited liability company you pay only one level of tax upon a sale of the company, while with a C corporation you pay two levels. That can make an enormous different to the IRRs of founders and investors.

Yet many startups are formed as C corporations. Why?

In Silicon Valley successful startups are funded by venture capital funds. Indeed, the most common measure of “success” in Silicon Valley is which venture capital funds have funded a startup, for how much, and how many times.

Venture capital funds are themselves funded, in part, by deep-pocketed nonprofits like CALPERS and Harvard.

All nonprofits are subject to tax on business income, as opposed to income from their nonprofit activities. For example, Harvard can charge a billion dollars per year in tuition without paying tax, but if it opens a car dealership it pays tax on the dealership’s profits. The car dealership income is called “unrelated business taxable income,” or UBTI.

Now suppose Harvard owns an interest in a VC fund, which is structured as a limited liability company or limited partnership (as all are). If the VC fund invests in an LLC operating a car dealership, then the income of the dealership flows through first to the VC fund and then from the VC fund to Harvard, where it is again treated as UBTI, subjecting Harvard to tax and reporting obligations.

Harvard doesn’t want to report UBTI! So Harvard tells the VC fund “Don’t invest in LLCs or partnerships, only C corporations, where the income doesn’t pass through.” And because Harvard writes big checks, the VC fund does what Harvard wants.

That’s why the Silicon Valley ecosystem uses C corporations. Everyone knows about the extra tax on exit, but everyone is willing to pay it on exit to get the big checks from Harvard.

I will pause to note that in many cases the nonprofit’s concern about UBTI is illusory. Many startups never achieve profitability, including startups sold for big numbers. So there would never have been any UBTI in the first place.

(Yes, I know that there’s no extra tax in an IPO or tax-free reorganization, but those are small exceptions to the general rule.)

Because Silicon Valley is the center of gravity in the American startup ecosystem, like the black hole at the center of the Milky Way, it exerts a force that is not always rational. Many investors, including funds with no nonprofit LPs and hence no possibility of UBTI, will tell startups “I only invest in C corporations,” simply based on the Silicon Valley model.

This creates a dilemma for founders, especially in the Crowdfunding space. If I’m an LLC and list my company on a Reg CF platform, how do I know I’m not losing investors who think, irrationally, that they should only invest in C corporations?

In any case, that’s where we are. LLCs are better in most cases because of the tax savings on exit. But because of the disproportionate influence of the Silicon Valley ecosystem in general and deep-pocketed nonprofit investors in particular, many investors and founders think they’re supposed to use C corporations.

Questions? Let me know.

The Crowdfunding Bad Actor Rules Don’t Apply To Investors

On By crowdfundattnyIn 100 Investor Rule, Accredited Investor, Investor, Investor Disclosures, Reg CF, Regulation A, Rule 506, Title III, Title III CrowdfundingLeave a comment

I often see Subscription Agreements asking the investor to promise she’s not a “bad actor.” This is unnecessary. The term “bad actor” comes from three sets of nearly indistinguishable rules:

  • 17 CFR §230.506(d), which applies to Rule 506 offerings;
  • 17 CFR §230.262, which applies to Regulation A offerings; and
  • 17 CFR §227.503, which applies to Reg CF offerings.

In each case, the regulation provides that the issuer can’t use the exemption in question (Rule 506, Regulation A, or Reg CF) if the issuer or certain people affiliated with the issuer have violated certain laws.

Before going further, I note that these aren’t just any laws – they are laws about financial wrongdoing, mostly in the area of securities. Kidnappers are welcome to use Rule 506, for example, while ax murderers may find Regulation A especially useful even while still in prison.

Anyway.

Reg CF’s Rule 503 lists everyone whose bad acts we care about:

  • The issuer;
  • Any predecessor of the issuer;
  • Any affiliated issuer;
  • Any director, officer, general partner or managing member of the issuer;
  • Any beneficial owner of 20 percent or more of the issuer’s outstanding voting equity securities, calculated on the basis of voting power;
  • Any promoter connected with the issuer in any capacity at the time of filing, any offer after filing, or such sale;
  • Any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities; and
  • Any general partner, director, officer or managing member of any such solicitor.

Nowhere on that list do you see “investor.” The closest we come is “Any beneficial owner of 20 percent or more of the issuer’s outstanding voting equity securities,” but even there the calculation is based on voting power. In a Crowdfunding offering you wouldn’t give an investor 20% of the voting power, for reasons having nothing to do with the bad actor rules. 

So it just doesn’t matter. This is one more thing we can pull out of Subscription Agreements. 

I know some people will say “But we want to know anyway.” To me this is unconvincing. If you don’t ask about kidnapping you don’t need to ask about securities violations.

Questions? Let me know.

Crowdfunding web portal

Updated Crowdfunding Cheat Sheet

On By crowdfundattnyIn Crowdfunding, Crowdfunding Cheat Sheet, Regulation CF, Regulation S, Rule 506(c), Title II, Title II Crowdfunding, Title III, Title III Crowdfunding, Title IV of the JOBS Act3 Comments

I first posted this Crowdfunding Cheat Sheet in January of 2014. Since then the rules have continued to change and improve. So here’s the current version, up to date with all the new rules and also expanded to answer questions my clients ask. For example, I’ve added a column for Regulation S because many clients want to raise money from overseas while simultaneously raising money here in the U.S.

I hope this helps, especially those new to the world of Crowdfunding.

CLICK HERE TO VIEW THE UPDATED CROWDFUNDING CHEAT SHEET

Questions? Let me know.