BizTech Law Blog

The SEC Crowdfunding Proposed Regulations: Progress Updates & Post Offering Issuer Reporting Requirements

Progress Updates

During the course of a crowdfunding offering, the proposed SEC crowdfunding regulations require the issuer (the company raising capital) to provide a progress update no later than five business days after the issuer reaches one-half of its targeted offering amount, and again after the issuer reaches 100 percent of its targeted offering amount.  If the issuer will accept proceeds in excess of the targeted offering amount, a third progress report will have to be filed no later than five business days after the offering deadline. 

The progress update is to be provided on Form C:  Progress Update (Form C-U).  Click here to see a copy of proposed Form C. 

The issuer will be required to file the Progress Update with the SEC on EDGAR, provide a copy to the issuer’s intermediary and investors signed up to date, and if the offering is continuing, make the Progress Update available to potential investors.  Read More ›

Categories: Crowdfunding, Venture Capital/Funding

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The SEC Crowdfunding Proposed Regulations: Overview of Issuer Financial & Disclosure Requirements

In a crowdfunding offering, the financial information the issuer (the company that is raising capital) is required to disclose will be determined in part by specific requirements built into the JOBS Act, and in part by SEC regulation.  The proposed crowdfunding regulations include the following financial disclosure requirements:  Read More ›

Categories: Crowdfunding, Venture Capital/Funding

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The SEC Crowdfunding Proposed Regulations: Overview of Offering Statement & Non-Financial Disclosure Requirements

As is always the case, in the SEC's proposed crowdfunding regulations, the information an issuer (the company that is raising capital) is required to include in its offering statement is quite detailed. We present a high level overview below. Read More ›

Categories: Crowdfunding, Venture Capital/Funding

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The SEC Crowdfunding Proposed Regulations: Deadline for Comments & Format for Issuer Disclosures

Deadline for Comments. The SEC's proposed crowdfunding regulations have now been published in the Federal Register. The deadline for submitting comments is February 3, 2014. As noted in our prior article, comments can be submitted electronically through the SEC's website, sec.gov, and at times, the SEC chooses to extend the comment period.

Format for Issuer Disclosures. Under the JOBS Act, the issuer (the company raising capital) must file specific disclosures with the SEC, and provide these disclosures to investors and the registered intermediary hosting the offering. The proposed regulations require the disclosures filed with the SEC to be filed through EDGAR (the SEC's Electronic Data Gathering Analysis and Retrieval System) on a new Form C. Read More ›

Categories: Crowdfunding, Venture Capital/Funding

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Trade Secret Theft: Speed Date Sues Match.com for $6 million

Speed Date USA, Inc. is suing the online dating company Match.com for $5.65 million for allegedly breaching its contract and misappropriating trade secrets. In essence, the lawsuit claims that Match.com terminated the contract early and then breached its obligations to hold joint events. Match.com terminated the contract, according to the lawsuit, upon learning Speed Date's trade secrets. Match.com then allegedly began to run its own speed dating events without compensating Speed Date USA.

Trade secrets are commonly defined by state statues and generally consist of four elements for the information to constitute a trade secret. The elements of a trade secret are: (i) information; (ii) that has independent economic value; (iii) which is not generally known or readily available; and (iv) such information is subject to reasonable efforts to maintain its secrecy. Read More ›

Categories: E-Commerce, Intellectual Property, Trade Secrets

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The SEC Crowdfunding Proposed Regulations: Investor Maximum Investment Amount

As a reminder, under the JOBS Act, each investor is limited as to how much the investor can invest in an issuer (the company raising capital) using the crowdfunding exemption during a 12-month period of time. There were some ambiguities in the language of the Act. The SEC proposes to clarify the ambiguities such that the limitations are as follows:

• If the investor’s annual income and net worth are both less than $100,000, the investor may only invest the greater of $2,000 or 5% of the investor’s net worth during a 12-month period.
• If either the investor’s annual income or the investor’s net worth exceeds $100,000, the investor may only invest the greater of 10% of the investor’s net worth or 10% of investor’s annual income, but not to exceed $100,000 during a 12-month period.

Categories: Crowdfunding, Venture Capital/Funding

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The SEC Crowdfunding Proposed Regulations: Use of Intermediary & Disqualified Issuers

Use of Intermediary. The proposed crowdfunding regulations require the issuer (the company raising capital) to make an offering through only a single intermediary. The SEC apparently believes that in order for an intermediary to perform the necessary monitoring functions, the intermediary needs to be the sole provider of intermediary services. Furthermore, the SEC sees value in having all public comments and discussions about an offering posted in one place. Read More ›

Categories: Crowdfunding, Venture Capital/Funding

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The SEC Crowdfunding Proposed Regulations: Platform for Offering Issuer’s Maximum Offering Size

Platform for Offering. The SEC is proposing to limit the availability of the crowdfunding exemption to offerings that are made through a registered intermediary on an Internet website or similar electronic medium, referred to in the proposed regulations as a “platform.” Accessibility through mobile devices is permitted. What the SEC wants to assure is that the offering occurs in a technology environment that will be accessible to the public and allow members of the crowd to share information and opinions. The JOBS Act does not require this limitation. It appears that the SEC is placing considerable emphasis on the benefits of the role of online discussion forums. Read More ›

Categories: Crowdfunding, Venture Capital/Funding

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The SEC Crowdfunding Proposed Regulations: Process Overview

In his recent blog posting, my colleague, John Mashni, noted that on October 23, 2013, the SEC issued a release containing the long awaited proposed crowdfunding regulations.

The SEC release is 568 pages long with an additional 17 page exhibit. Reviewing the release is not for the faint of heart!

We will share some of the highlights from the release and proposed regulations in bite sized pieces over a period of several weeks. We hope this will make the information easier for you to digest. Read More ›

Categories: Crowdfunding, Venture Capital/Funding

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The Bitcoin: What It Is and Where It's Going

Bitcoin is an application of crypto-currency, which is based on the premise that money can be any object or record that is accepted as payment. Bitcoins use a peer-to-peer networking system and are not managed by any central authority. They can be transferred by a computer or a smartphone without a mediating financial institution. Bitcoins are rumored to have been originated by a computer programmer going by the name of Satoshi Nakamoto, whose real identity remains mysterious. Learn more about Bitcoins ›

Categories: E-Commerce

Posted by: Michael C. Zarht (Summer Associate)

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