Perhaps no asset is more valuable when beginning a company than capital. Raising capital, though, requires compliance with applicable security laws or risking legal repercussions. Here are five tips for startups engaged in the process of raising capital: Pick the Right Investors While getting someone to write you a check is important, the person writing that check is equally as important. Look for an investor who can contribute more than money to the operation. Preferably,…
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On October 30, 2015, the Securities and Exchange Commission approved new rules for equity crowdfunding by companies as part of the JOBS Act (Title III), also known as Regulation Crowdfunding. The rules will become effective May 16, 2016. Here is a summary of the basic rules every business should know if it is looking to raise capital under the new crowdfunding regime. Caps for businesses and single investors. Businesses can raise only up to $1…
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The JOBS (Jumpstart Our Business Startups) Act was passed in 2012 with the intention of making it easier for investors to fund small businesses. This legislation was largely seen as a victory for the small business community as well as for investors alike. The JOBS Act removed many SEC regulations regarding who could and could not invest in startups, in addition to when a business was required to go public. Before the passage of the…
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As the world becomes more digital, and more information is posted to websites and available to the general public, it has become necessary for state and federal government agencies to create laws governing internet privacy. Sometimes, the laws change so quickly it is impossible for even the most conscientious company to stay current on which regulations have been enacted. That is why it is imperative to have an attorney who is well versed in your…
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Preparing for a major day in court requires a deep understanding of all current laws and statutes. In California, where laws can shift not only through the legislature but through voter-created propositions, it is extremely difficult to stay on top of current guidelines. For example, were you aware that changes have been made to California’s anti-securities fraud statute several times since it was established? The original California Securities Law passed in 1968, establishing guidelines for…
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