Crowdfunding on Steroids
General Solicitation Under Rule 506(c)
Failed to add items
Add to Cart failed.
Add to Wish List failed.
Remove from wish list failed.
Follow podcast failed
Unfollow podcast failed
Buy Now for $9.20
No default payment method selected.
We are sorry. We are not allowed to sell this product with the selected payment method
-
Narrated by:
-
Jake Teller
-
Written by:
-
Douglas Slain
About this listen
The new Rule 506 changes everything. The SEC has lifted an 80-year ban on general solicitation. Start-ups for the first time can use public advertising to sell private offerings. The new Rule 506 may prove to be the answer to the prayers of star-ups frustrated with existing fund sourcing platforms. But it also has hidden dangers that will cause many issuers to continue to use the "old Rule 506" [506(b)]. Among the new Rule 506 strengths:
- The amount that can be raised is unlimited
- There is no requirement for review of the offering under any Blue Sky laws (state securities regulations)
- There is no review of the offering by the SEC
- Solicitations can be online or offline
Solicitations can be made to anyone! Sales (as opposed to solicitations) must be to accredited investors, and issuers must be able to verify that any actual investor is accredited. Also, proposed rules will require issuers to send the SEC all marketing copy; as of this writing, however, there is no need to send copies of solicitation materials to the SEC (or to state regulators).
©2015 Douglas Slain (P)2017 Douglas Slain