Can transfer agents save democracy?

A long time ago in what seems like a different universe, I was working on an IPO for a company that will have to remain unidentified in a country that never experienced Enlightenment thinking. The company’s CEO and majority owner decided to challenge the local dictator’s political leadership. Dictator X didn’t take kindly to that […]

Raising funds under Reg CF for acquisitions

There’s an interesting contrast between Regulation A and Regulation CF in terms of disclosure. Reg A requires that issuers provide financial statements for “businesses acquired or to be acquired.” Even if that’s not what the money is being raised for. If you just acquired, or are probably going to acquire, a business (and it doesn’t […]

Why Reg S doesn’t work with online offerings

Anyone who knows me knows my link with the SEC’s Regulation S. While folks sometimes refer to it as an exemption from registration under the Securities Act, it’s not. Reg S provides that the registration provisions of the Securities Act simply do not apply to offers and sales made outside the United States, and then […]

Subsidiaries using Reg CF

This came up no less than three times last week, so I figured it was worth a blog post. Subsidiaries can raise funds under Reg CF, even if they are subsidiaries of companies who cannot use Reg CF themselves, because they have a class of securities registered with the SEC, or they are not US […]

Why Reg CF doesn’t work for many VC-backed companies

Since the increase in the maximum offering amount to $5 million a couple of years ago, we’ve seen more interest in Reg CF offerings by venture-backed companies. Sadly, it doesn’t work for a lot of them. This is because of what we refer to as the “issuer aggregation rule”. Rule 100(c) explains that “issuer” for […]

I’m crowdfunding. Do I really need a transfer agent?

We keep hearing this question. To be honest, it’s not clear why a crowdfunding issuer would want to have to deal with the recordkeeping for what could be thousands of investors (and even if the issuer uses a Reg CF SPV, that itself is an issuer whose many shareholders have to be wrangled). But are […]

Form C-AR filing time again!

Hi everyone; a reminder that we are just over a month away from the deadline to file Form C-AR by May 1.* We wanted to flag some issues: If you sold any securities under your Form C, even if you didn’t sell them until this year, and even if you didn’t sell them until April […]

When a picture tells a thousand words . . .

That picture probably isn’t an emoji, because emojis aren’t detailed enough for a message of that size. But they do convey some information, which is why, we assume, people use them. And since emojis are capable of conveying information, they are also capable of conveying misinformation, even misleading information that violates the securities laws. For […]

The SEC is not your mom

We’ve been having a lot of “why can’t we do what they are doing?” conversations recently. Potential issuers have asked: Why can’t they structure a Reg A real estate offering where the issuer invests in minority holdings in other real estate companies? Why can’t they file a 1-Z to exit the Reg A reporting system […]

No, this is not crypto!

We’ve heard from some of our clients that potential investors are getting spooked by the crypto winter and the FTX meltdown. Yes, you can invest in crypto online, just like you can invest in online exempt public offerings under Regulations A, CF and D. But that’s pretty much where the similarity ends. There are a […]