In connection with a private offering of securities the issuer will provide potential investors with some form of disclosure document. Regardless of what type of offering it is (e.g. Rule 506, Title III, Intrastate, or other private offering), the intent of this disclosure document is to give potential investors all material information about the company and the deal before they invest. Unfortunately many issuers see this exercise as more of a burden and typically opt for providing only the minimum amount of information possible. This type of approach can often lead to trouble later and with all of the new private offering options available to issuers I thought I would share some my thoughts on the subject.
In early June, the U.S. House of Representatives, Financial Services Committee, approved the “Fix Crowdfunding Act” bill (or HR 4855). Maybe it’s the title of the bill that is misleading, but since then I have seen multiple articles which incorrectly describe what this bill, if fully passed, would do. As a result I felt it necessary to do a detailed review of the bill itself to point out what in fact it actually does and doesn’t do.
The UK crowdfunding market is the leading, and most successful, crowdfunding market for several reasons. Arguably the primary reason for their success is that the UK tailored, and continues to tailor, their securities laws specifically to promote crowdfunding/P2P lending. A lesser known reason however, is the availability of certain tax incentives for angel investors. Tax incentives which the U.S. currently does not, but certainly should, have available.
With the Federal Title III rules recently becoming effective, there is certainly a lot of excitement surrounding national level “retail” crowdfunding to non-accredited investors. That’s obviously great news for the industry, but it’s important to remember that the majority of the states currently have some form of “intrastate” retail crowdfunding laws already in effect; many of which offer significantly more favorable terms to issuers and investors than the federal rules. Moreover, the number of states passing these laws, and their use, continues to grow making them viable capital options for many companies.
As many of you know, I do a lot of speaking engagements through Illinois pitching the new Illinois crowdfunding laws and advising small and emerging Illinois businesses about all of the new types of available funding options. In doing these speaking engagements, I recently realized that there wasn’t a single conference in Illinois that was tailored toward bringing incubators/accelerators, VC/angel investors, and emerging businesses together. So, being the type of person I am, I decided to create one … oh, and its FREE to attend!Contact Me:
Anthony J. Zeoli
Tel 773.983.9133
Fax 312.360.6520
anthony.zeoli@gmail.comBlogroll
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