As we were writing these posts, “rolling funds” became a topic of conversation on “VC Twitter”. Ignoring the “rolling” part for a second, these are simply funds marketed publicly - and so have to use the 506(c) exemption.Although supposedly “revolutionary”, using...
506(c) offeringsAs you could probably guess from the last post, it is not actually that easy to qualify for a 506(b) exemption. However, all is not lost if you do not have pre-existing, substantive relationships with accredited angel investors eager to invest in early...
Pre-existing relationshipsOne way to avoid general solicitation is to ensure that securities are only offered to those with whom the issuer has a “pre-existing, substantive relationship”.Naturally, this raises the question: what is a “pre-existing” relationship? How...
Who was General Solicitation?The short answer: publicly advertising that you are selling securities.The longer answer begins in 1933. That year, Congress passed the Securities Act. (If you like primary sources you can download the full text here, from the SEC’s...
If you came back after yesterday’s post, we commend your dedication! You may (understandably) not particularly care about the intricacies of the Securities Act of 1933, the resulting SEC rules, or their state-level equivalents. However, if you are trying to raise...
At VentureSouth, we’ve learned a lot from Twitter. We also try hard to avoid trouble with regulators - both for ourselves and our portfolio companies. Over the past few weeks, those previous sentences have created some cognitive dissonance as we’ve watched...