“iDisclose” – Breaking Today’s Archaic Securities Disclosure Process

idisclose-robotThe process of drafting a full-blown “Private Placement Memorandum” (or similar securities disclosure document) has always been a very time consuming, and frankly overly expensive, process for several reasons. The primary reason is of course that the legal industry has traditionally been extremely slow to leverage new forms of informational technology. Another main reason is that the current drafting process relies more heavily on the attorney than it really should (something that, as an attorney, you will almost NEVER hear me say). By redesigning the process to correct both of these issues, iDisclose (the brain-child of Georgia Quinn of Ellenoff, Grossman & Schole) has created a win-win situation for both the attorney and the client.

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Beware Of Companies Touting “506(b) Compliant” Internet Platforms

Steve Jobs is quoted as saying that “innovation distinguishes between a leader and a follower.” While I personally agree with this statement, and it may certainly be the case in the mobile device and other industries, when it comes to the offering and sale of securities the Securities and Exchange Commission (SEC) tends to play by a difference set of rules. Hence, if you are going to be an innovator in the securities industry, you had better be damn (excuse my French) certain that what you are proposing has been vetted, or otherwise will be approved, by the SEC. Unfortunately I do NOT believe the new “506(b) Compliant” internet platform being offered and advertised by SendPPM.com falls into this category.

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PRESENTATION – How To Use The Illinois Crowdfunding Exemption To Raise Capital

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As the author, and biggest proponent, of the recently signed Illinois Intrastate Crowdfunding bill (HB 3429) I have been doing my best to get the word out about it and the potential it holds for Illinois business and investors. As part of that effort, I recently did a presentation at 1871 herein Chicago entitled “The Illinois Crowdfunding Exemption and How To Use It To Raise Capital.”  I thought it would be beneficial to post that presentation here for those that were unable to attend and might be interested.

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SEC Issues New Guidance: Use Of The Internet Not Always Considered General Solicitation

No Action2Last week the Securities and Exchange Commission (SEC) responded to a “no-action” letter (RE: Citizen VC, Inc.) concerning the establishment of “substantive relationships” with previously unknown potential investors and what constitutes “general solicitation” in the context of a private securities offering. The SEC also issued several new Compliance and Disclosure Interpretations (C&DIs) last week centered around the same topic. While the majority of this guidance is more applicable to traditional 506(b) offerings (i.e. non-crowdfunded offerings), the new guidance is still applicable to many current offerings (particularly those done by private investment/VC/PE funds).

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How Good Is Too Good? The Underwriting Risks Of Crowdfunding Real Estate Deals

Crowdfunding RiskThe awareness and popularity of real estate based equity crowdfunding (i.e. “RECfunds”) continues to grow exponentially. As do the number of real estate crowdfunding portals. RECFunds offer substantial benefits to today’s investors including access to multiple types of projects, smaller barriers to investment, and portfolio diversification. RECfunds carry some significant risks as well however. One of the lesser known risks to some investors is the risk that the project is not being “underwritten” properly.

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