Investor Alert 2: Has your company provided you with updates?
All companies that accept investments under Reg CF need to provide an annual update to their investors, to be filed on the SEC’s EDGAR system on Form C-AR and posted on the company’s own website. It’s really important that as an investor, you know what the company has done with your money in any given […]
Investor Alert 1: Is your company in good standing?
We are doing a new series on Investor Alerts, focusing on what investors should pay particular attention to when investing in early stage companies. Today’s issue is whether a company is in Good Standing. The SEC has highlighted this issue as one of the red flags that the offering might be scam. Every company must […]
Stop using the F-word!
Fraud – lots of people talk about it, but what is it? Many in the crowdfunding world see it as a bad guy running away with your money, and believe that the “collective wisdom” of the crowd is able to spot any scams before your money is lost. However, it rarely is that simple. The […]
What due diligence looks like – Part 1: Checking that shares are properly issued
We’re kicking off our Due Diligence Series with one of the most fundamental issues in crowdfunding due diligence: making sure that the shares being offered have been properly issued. Pretty basic, right? If the shares haven’t been properly issued the investment may end up being worthless. Securities lawyers refer to properly-issued shares as being “duly […]
Better disclosure results in a better price
It’s tempting to reveal very little information when trying to make a sale. We all want to put our best foot forward, and to reveal imperfections only when we absolutely have to. For example, when selling a car, a seller might want to reveal the car’s age and mileage, but be reluctant to reveal other […]
The 5 Ws of Due Diligence
What is due diligence Due diligence is the legal term for kicking the tires before you make an investment. We do due diligence all the time in our lives – checking prices and reviews online to make sure we get the best deals, talking to our children’s friends to be sure they aren’t bad influences, […]