This week we present you with our next video in our series of six video blogs on hot topics, this one on “Accredited Investor Crowdfunding: Using General Advertising and Solicitation in Selling Your Stock.”
We hope you enjoy.
Here’s the script if you want to follow along:
0:01the I’m Michael Williams
0:04securities attorney with the Williams Securities Law Firm.
0:08let’s talk about a brand new development in securities law
0:12general advertising and solicitation. it used to be
0:18if you’re going to raise money privately that is without a filing with the SEC
0:23you couldn’t go out on the Internet or anywhere else
0:26and advertise for investors. congress
0:30changed that in adopting the JOBS Act.
0:33but they made it limited. the Securities and Exchange Commission
0:38probably didn’t like this change at all
0:41so they took a long time to promulgate the regulations and these regulations, which
0:47are difficult to understand
0:52you have to do an offering under Rule 506
0:56that’s not so easy because it requires
1:00full disclosure a full disclosure document it also requires
1:07appropriate filings with state securities commission
1:10so it’s not just “put an add up on the Internet”
1:14and people flock to you. there’s things you have to do to get ready.
1:18now your advertisements up your documents are done
1:21you help put an ad on the internet or somewhere else on your
1:25website. what’s your limitation?
1:29you can’t take everybody: that’s what the rule
1:33 you can I take people
1:37who are accredited investors. what are accredited investors?
1:41there’s a number of definitions for institutions but let’s talk about people
1:46its people who have a net worth
1:49excluding their home a million dollars or
1:53who made two hundred thousand dollars a year in the last two years
1:58if they’re single or 300,000 if they’re married
2:01and have an expectation that the same but here’s the catch:
2:05you are responsible for
2:08verifying that they are accredited.
2:12so they can’t just box check anymore.
2:15the Commission in the rulebook tells you what you have to do.
2:19can you use general advertising and solicitation
2:23to go find investors? yes
2:26are things you need to do before? yes
2:29are there things you need to do as you find investors?
2:33yes. are those things you have to do when you finish the offering?
Do you want to know exactly what you have to do to make an All Accredited Investor Rule 506(c) offering, also known as “Accredited Investor Crowdfunding,” using general advertising and solicitation without breaking the law?