FizzLaw: small business guide to lawyers

FizzLaw: small business guide to lawyers

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John M.

John

Myer Law PLLC

How does a start-up company find investors? Up to now, that was the real barrier. In essence, a start-up could raise money from people it already knew, but could not advertise that it was looking for investors. But Section 201 of the JOBS Act changes the playing field fundamentally. The SEC has been instructed by Congress to modify Rule 506 by July 4, 2012 so that the prohibition against general solicitation and advertising found in Rule 502(c) will not apply to transactions under Rule 506 if all investors are accredited.

Rule 506 of Regulation D is a safe harbor for the private offering exemption of Section 4(2) of the Securities Act.  The Rule allows issuers to raise an unlimited amount from accredited investors. Rule 502(b)(1) prescribes no...

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  • April 30, 2012
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