This webinar explores what many call “accredited investor crowdfunding,” effectively established by the JOBS Act in mandating the elimination of a ban on general advertising and solicitation in private offerings carried out pursuant to Rule 506 of Regulation D under the Securities Act of 1933, and authorizing the creation of Internet platforms specifically designed to facilitate compliant Rule 506 offerings to accredited investors.
Rule 506 of Regulation D permits private offerings by an issuer in unlimited amounts to an unlimited number of “accredited” investors, as that status is defined in Regulation D, and up to 35 non-accredited investors, provided all conditions of the Rule, and Regulation D generally, are satisfied. Although private offerings under Rule 506 have long been a capital formation option for small business and start-up issuers, a Regulation D prohibition on the use of general advertising or solicitation significantly limited the ability of issuers to identify and connect with interested accredited investors, while at the same time preventing those investors from easily identifying desirable investment opportunities.
The JOBS Act directed the SEC to eliminate this practical barrier to small business capital formation by removing the prohibition on general advertising and solicitation for Rule 506 private offerings provided sales are made only to accredited investors. The SEC responded with the addition of Rule 506(c), which did away with the ban on general advertising and solicitation for offers, but which imposed a stringent issuer verification requirement for accredited investor status of purchasers. Buttressing the expanded Rule 506(c) capital formation alternative, the JOBS Act provided for the creation and operation of Internet platforms for bringing together issuers and accredited investors. This webinar presents practical guidance in carrying out a compliant Rule 506(c) private offering and understanding the operation, and limitations, of the emergent JOBS Act permitted platforms through which private offerings to accredited investors may be accomplished.
Robert N. Rapp is Visiting Assistant Professor of Law at the Case Western Reserve University School of Law, where he teaches Securities Regulation, Advanced Securities Regulation and Law, Theory and… Read More
Jordan is a co-founder and board member of OpenFinance and CFX Markets, an online trading platform for non-public investments that is transforming how people view and hold alternative asset positions.… Read More
Kris is a Partner in the Securities and Capital Markets Practice of Calfee, Halter & Griswold LLP, Cleveland, Ohio. He practices corporate and securities law, and advises both public and… Read More