The Venture Alley - A blog about business and legal issues important to entrepreneurs, startups, venture capitalists and angel investors.

CONTRIBUTED BYAndrew Ledbetterandrew.ledbetter@dlapiper.com   As anticipated in our previous blogs, the SEC yesterday proposed rules to permit general solicitation and general advertising in Rule 506 and Rule 144A offerings.  The release proposes to create a new Rule 506(c), in which the prohibition against general solicitation would not apply to offers and sales of securities, provided that: The issuer takes reasonable steps to verify that the purchasers are accredited investors; All purchasers of the securities are accredited investors, either because they come within one of the enumerated categories or the issuer reasonably believes that they do, at the time of the... More

CONTRIBUTED BYMegan Muirmegan.muir@dlapiper.com  The Jumpstart Our Business Startups Act (the JOBS Act), enacted in April this year, makes a variety of significant changes to securities laws, some of which relate to early-stage entrepreneurs, startup companies and venture capitalists concerned about fund raising with respect to their portfolio companies. In this article, I address provisions of the JOBS Act most applicable to startup companies and venture capitalists that fund them. In this piece, I will not be covering other changes in the Act such as broker/dealer regulations, “Reg A+”, or the changes to research reporting and analyst rules.  IPO On-Ramp The... More

CONTRIBUTED BYMegan Muirmegan.muir@dlapiper.com                        In an interview for NACD Directorship magazine entitled Noteworthy Legal Issues for Pre-IPO and Small-Cap Directors, DLA Piper partner and colleague Peter M. Astiz, co-head of our Global Technology Sector Practice, provided updated information concerning director fiduciary duties, voting and control issues raised by FaceBook's structure, the JOBS Act and regulation under Sarbanes-Oxley.  NACD Directorship magazine is published by the National Association of Corporate Directors. The article can be found here.... More

CONTRIBUTED BYAndrew Ledbetterandrew.ledbetter@dlapiper.com In today’s age of social media success stories, there is something superficially interesting about crowdfunding as a high-level idea.  There has certainly been no shortage of attention to crowdfunding in the press and from business people.  But in looking at the new JOBS Act exemption for crowdfunding, I see lots of reasons why many companies will avoid it.  While this list could be expanded – and will need to be revised as the SEC adopts rules to implement the new exemption – to get things started I offer up these ten reasons:... More

CONTRIBUTED BYMegan Muirmegan.muir@dlapiper.com  Join us for a complimentary webinar regarding the Jumpstart Our Business Startups Act (the "JOBS Act").  This one-hour webinar for venture capital investors, private equity firms, startup entrepreneurs, late stage companies and management of portfolio companies will cover the following provisions of the Act: The IPO “on-ramp” Reduced initial and ongoing reporting requirements for “emerging growth companies” Confidentiality of SEC registration statements Easing of restrictions on issuance of research reports by participating underwriters Private offerings Relaxation of prohibition on general solicitation in private offerings to accredited investors Increased stockholder thresholds before public company reporting requirements are triggered New... More

On March 27th, the US House of Representatives overwhelmingly passed the Jumpstart Our Business Startups Act (JOBS Act) with the Senate's recent amendments. Next stop is the President's desk for what is anticipated to be speedy signature. The legislation is intended to improve the ability of emerging growth companies to access capital by relaxing certain rules in private offerings as well as in the period following a company's initial public offering.  Read the details in this summary by our colleagues Christopher C. Paci, Edward Batts, Ann Lawrence, Jason C. Harmon, Christopher B. Edwards, and Andrew D. Ledbetter.... More

CONTRIBUTED BYMegan Muirmegan.muir@dlapiper.com  Yesterday (March 22), the Senate passed the Jumpstart Our Business Startups Act (JOBS Act), which could make it easier for startups and other small businesses to raise capital.  The bill now goes back to the House, which passed a similar bill two weeks ago, for the reconciliation process, which may occur as early as next week.  Some of the proposed changes to federal securities laws in the bill would: Exempt, for up to five years, “emerging growth companies” (those with under $1 billion in annual gross revenues) from certain financial reporting obligations, auditor attestation of internal controls,... More