Small business of-interest and need-to-know.
Excerpt: In our article, Redrawing the Public-Private Boundaries in Entrepreneurial Capital Raising, we examine what the JOBS Act (enacted earlier this year) tells us about the division between the public and private spheres in securities regulation. On its face the JOBS Act broadly expands the private realm as defined by our national securities laws. It provides two new exemptions from registration (crowdfunding and Regulation A+) and will broadly expand the reach of the most-used existing exemption from registration by removing the ban on general solicitation from exempt offerings made pursuant to Rule 506, provided they are made only to accredited investor. Yet legislative reform has done little to shore up the shaky foundation of existing theory that guides how we have thought about dividing public from private obligations in this area of the law.
Read full article via Redrawing the Public-Private Boundaries in Entrepreneurial Capital-Raising — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
Small business update on JOBS act and SEC interpretation, explanation and FAQ.
Excerpt: On August 22, 2012, the SEC Division of Trading and Markets (the “Staff”) published answers to 14 frequently asked questions (“FAQs”) relating to certain provisions of Title I of the Jumpstart Our Business Startups Act, signed into law on April 5, 2012 (the “JOBS Act”), affecting research analyst and investment banking personnel conduct in connection with emerging growth companies (“EGCs”).
The most noteworthy guidance, in our view, relates to the following: …….
Read full article via SEC Division of Trading and Markets Issues Guidance on JOBS Act — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
Harvard this morning discusses another proposal with pros and cons visited. Small business of-interest, news-to-watch and need-to-know.
Excerpt: In recent years, the need for the prohibition against general solicitation has been the subject of increasing debate, particularly in light of changes in communication technologies. New technologies have caused many to question the feasibility and continued desirability of communication restrictions in private offerings.
This is one of the reasons why, even before Congress enacted the JOBS Act, I had instructed the staff to take a fresh look at the prohibition in Rule 506 and develop ideas to reduce regulatory constraints on capital formation in a manner wholly consistent with investor protections.
Read full article via Proposed Rule Regarding General Solicitation and Advertising — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
Small business of-interest, need-to-know and news-to-watch. Accounting and audit
Excerpt: Auditing Standard No. 16 is the first standard that the PCAOB has adopted following enactment of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, a new PCAOB standard will not apply to audits of “emerging growth companies” (“EGCs”) unless the SEC determines that the application of the standard is “necessary or appropriate in the public interest, after considering the protection of investors and whether the action will promote efficiency, competition, and capital formation.” At its August 15 meeting, the PCAOB expressed its view that the SEC should approve the application of the new standard to EGCs.
Read full article via PCAOB Adopts New Audit Standard on Communications with Audit Committees — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
Small business of-interest, need-to-know and news-to-watch — SEC public versus private.
Excerpt: In our article “Publicness” in Contemporary Securities Regulation after the JOBS Act, forthcoming in the Georgetown Law Journal, we focus on the ideologically-charged question of when a private enterprise should be forced to take on public status, an extraordinarily significant change in its legal obligations and freedom to maneuver. The JOBS Act, which became law in April 2012, makes the first change in almost a half century in the criteria specified for companies that must meet public obligations under the Securities Exchange Act of 1934. Congress increased the “private space” by raising the 500 shareholder threshold to 2000 (so long as no more than 499 of those are not “accredited investors”) and permitting most new IPO companies to skip a host of regulatory obligations during their first five years as a public company.
Read full article via “Publicness” in Contemporary Securities Regulation after the JOBS Act — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
With the JOBS Act in place, the crowdfunding offers and sites are growing. This article gives you an overview of the crowdfunding by niches to help you source the right one.
Excerpt: Variations of this phenomenon are flooding the internet, with new platforms being created and launched every day. As crowdfunding platforms become more prevalent, more niches are being defined. Whether you are a tech-savvy entrepreneur or a food connoisseur, there is a perfect crowdfunding website to gather support and fuel your new business.
Below are six online crowdfunding platforms, each targeting different users in specific industries
Read full article via How to Pick the Best Crowdfunding Platform. From Mashable
Small business need-to-know ……crowdfunding interests mean you need to dot your i and cross that t……otherwise, you will fail!
Excerpt……Interest in crowdfunding continues to skyrocket, thanks to the record-breaking success of campaigns like the Pebble: E-Paper Watch, and Double Fine Adventure. The recent passage of the JOBS Act and the popularity of websites such as Kickstarter, RocketHub and IndieGogo have only reinforced its popularity.
But for every successful crowdfunding campaign you hear about, many more have utterly and completely failed to meet funding goals. The reasons? Well those are plentiful
Read full article….via 6 Crowdfunding Mistakes That Can Kill a Campaign. From Mashable.
Small business need-to-know and of-interest…
Excerpt……….The attached chart summarizes how certain JOBS Act provisions apply to these debt-only issuers. As indicated in the chart, they may benefit from a number of JOBS Act provisions with regard to their Securities Act registration statements and Exchange Act reports, including:
Read full article……via JOBS Act Applies to Debt-Only Issuers — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
Small business need-to-know ……..executive compensation rules under JOBS Act.
Excerpt……….The new Jumpstart Our Business Startups Act (JOBS Act), signed into law on April 5, significantly scales back and relaxes restrictions for so-called emerging growth companies under the Sarbanes-Oxley Act (SOX), the Dodd-Frank Act, and other securities laws. The EGCs generally include all companies conducting an initial public offering that have less than $1 billion in gross revenues in their most recent full fiscal year. The act’s purpose is to provide an “on-ramp” for private companies seeking capital by, in part, making the IPO process less burdensome and the transition to public ownership easier.
Read full article……..via Liazos JOBS Act executive compensation disclosure CD&A. From CFO.com
Important need-to-know for small business owners and entrepreneurs considering crowdfunding… the JOBS Act……
Excerpt………Because of the reporting and regulatory hurdles, crowdfunding as it’s specified in the Jumpstart Our Business Startups (JOBS) Act may be too complex and onerous — and not very cost-effective — for any of these early-stage ideas.
Originally, the ability to raise capital from a bunch of individuals through social media without having to register with the Securities and Exchange Commission sounded like a great opportunity for Mom-and-Pop shops or someone starting a business out of his garage. But many entrepreneurs may lack the financial acumen and robust business plans they’ll need to comply with the JOBS Act and possible further regulations from the SEC, say experts. And they also may not have the cash to hire the accountants and lawyers they will need to navigate the law.
Instead, the companies able to jump into crowdfunding, at the outset, will be more mature firms, says Nicole Denny, a CPA in the audit practice at Kaufman, Rossin, an independent accounting firm.
Read full article…….via crowdfunding costs compliance financial reporting JOBS Act liability kickstarter. From CFO.com
Small business need-to-know….
Excerpt………On April 5, President Obama signed into law the Jumpstart Our Business Startups Act (the “JOBS Act”), which as we’ve previously noted represents a very significant loosening of restrictions around the IPO process and post-IPO reporting obligations. While most of the commentary on this legislation has thus far focused on its impact on capital markets matters, there are implications for private company mergers and acquisitions as well.
Read full article……..via The JOBS Act: Implications for Private Company Acquisitions and M&A Professionals — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
More information and cautions……..Small business help with time to implement mandates but cautions slackness…..
Excerpt………The JOBS Act passed by Congress last week and being signed by the president on Thursday helps smaller public companies avoid for a few years the internal controls reporting and audit requirements put in place in 2002 in the wake of prominent accounting scandals.
Read full article…….via At Large and Small Companies, Internal Controls Matter – NYTimes.com.
Another post on the new law…..JOBS Act…. with answers to some of our questions on what is next.
Excerpt introduction…….The following post comes to us from Latham & Watkins LLP, and was coauthored by Latham and thirteen other firms, who are listed at the end of the memorandum. The memo is available here.
President Obama signed into law this week the Jumpstart Our Business Startups Act (JOBS Act). Title II of the JOBS Act affects offerings by issuers pursuant to Regulation D under the Securities Act, as well as resales under Securities Act Rule 144A. In particular:
Read full article……via The JOBS Act and General Solicitation — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
I am sure most of you have seen this news already but this article gives you a discussion of basics, what it means……
Excerpt……….Many of the JOBS Act’s provisions will be effective upon signing by the President, which is expected later this week. Others will require SEC rulemaking.
Read full article..via Congress Passes the “Jumpstart Our Business Startups Act” — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
Virtually every Title of the JOBS Act would benefit from greater scrutiny, but Title III of the Act, the Entrepreneur Access to Capital Act, poses the most urgent threat to retail, “Main Street” investors.
While intending to promote an Internet-based fundraising technique known as “crowdfunding” as a tool for investment, this title of the JOBS Act would needlessly preempt state securities laws and weaken important investor protections.
The concept of crowdfunding is appealing in many respects because it provides small, innovative enterprises access to capital that might not otherwise be available. Indeed, this is precisely the reason why states are now considering adopting a model rule that would establish a more modest exemption for crowdfunding as it is traditionally understood.
Read full article………via The JOBS Act: An Investor Protection Disaster Waiting to Happen — The Harvard Law School Forum on Corporate Governance and Financial Regulation.