Venture Capital & Emerging Growth

Stubbs Alderton & Markiles, LLP Client Alert

By July 11, 2013 No Comments

VC-Stock-ImageSEC Lifts Ban On General Solicitation, Allowing Startups
To Advertise That They Are Fundraising

The SEC has adopted rules implementing section 201(a) of the JOBS Act, which lifts the ban on general solicitation and advertising in private placement transactions.  This monumental change in the private placement regulations permits startups, venture capitalists, and hedge funds to openly advertise that they’re raising money in private offerings. Investment is still limited to accredited investors, and fundraisers must take reasonable steps to verify that investors are in fact accredited. In addition, issuers will have to file a Form D with the SEC at least 15 days before they begin general solicitation, and amend that Form D to state that they’re done soliciting within 30 days of finishing.  The rules will be effective in approximately 60 days.

Click here for a link to the SEC announcement and copies of the final rules:

SEC is still to rule on the most significant provisions of the JOBS Act, which would allow true equity crowdfunding. We will post further details as they become available.

For more information about the JOBS Act and crowdfunding, please contact Sean Greaney, Partner at Stubbs Alderton & Markiles, LLP  at (818) 444-4504 or