SEC Additions To JOBS Act May Create A Legal Minefield For Startups

first_imgMatt Asay Tags:#Congress#Government#JOBS Act#startups Life just got more complicated in startup land. While the U.S. Congress last year voted in the Jumpstart Our Business Startups (JOBS) Act to ease New Deal-era regulations on startups, the SEC has since loaded up the Act with even more regulations.While these changes are unlikely to prevent the next great startup from getting funded, they may well ensure it’s reasonably likely to get sued. Several of the industry’s most prominent investors, from Mitch Kapor to Fred Wilson, are crying foul.JOBS Act: A Good, Not Perfect, StartThe JOBS Act, passed in 2012 by an overwhelming 73-26 bipartisan majority, was intended to make life easier for startup companies. Given the role of startups in creating high-paying, high-impact jobs, it’s no wonder Congress wanted to smooth the way to greater startup success.Congress did this by adding four primary provisions to the JOBS Act:An easing of regulations to allow for crowdfundingAn increase in the shareholder ceiling for private companies from 500 to 2,000The ability for companies doing less than $1 billion in revenue to file an IPO confidentially with the Securities and Exchange Commission, which latitude Twitter recently used to file for its IPO(In response to the JOBS Act) a loosening of demands around General Solicitation by the SEC, or the ability of startups to more broadly solicit the purchase of shares in their companiesWhile no one thought the JOBS Act was perfect—former Wall Street financier Steven Rattner called it the “greatest loosening of securities regulation in modern history”—the tech industry generally welcomed the change. As Union Squares Ventures general partner Fred Wilson declared, “These new rules are much-needed regulatory relief for startup companies.”One Year (And Much More Regulation) Later…Wilson isn’t so optimistic anymore. Since the Securities Act of 1933 companies have been prohibited from generally marketing their securities to the general public (“General Solicitation”). But as the SEC has interpreted the JOBS Act, it has loosened these requirements, allowing general solicitation in a company’s securities.So far, so good.The problem is that the SEC has also introduced new regulations that effectively neuter the impact of this change. As Wilson argues, the SEC has added burdensome regulations to the JOBS Act that “effectively make General Solicitation a non-starter for startup companies.” Wilson lists the added burdens:If you want to use General Solicitation, you must limit your investors to accredited investors (investors that satisfy net worth or annual income requirements) and you must undertake some specific efforts to make sure that your investors are in fact accredited;A 15-day filing period for Form D before the company initiates its fundraising process;The requirement to formally file all written materials provided to investors with the SEC is very burdensome when entrepreneurs update their slides and other fundraising material from meeting to meeting; andThe penalty for violating any of these rules is a one-year prohibition from being able to raise capital under Rule 506.More disturbingly, says Lotus founder and active early-stage investor Mitch Kapor, “Practices that have worked well without incident for decades could suddenly become unintentional minefields for honest startups and sophisticated investors alike… This means that some of the most high profile ways new startups raise money transparently may now cause those same startups to go out of business if the penalties are enforced.”In other words, even startups that don’t intend to “generally solicit” may be found to be doing so. Things like demo days and even tweets could suddenly impose unexpectedly high hurdles on a startup’s funding plans.A Good Law Gone BadFor anyone that has raised venture capital, it will be immediately obvious why these rules won’t work. For example, usually companies are required to file for Form D within 15 days of raising capital. Requiring them to file before they even start, without even knowing if they’ll be able to raise money, is both problematic and potentially cumbersome. Some deals happen very fast and, indeed, speed is critical to getting a particular deal done on advantageous terms. This would ruin that.Or what about the requirement that startups only sell securities to accredited investors? This seems like a reasonable way to protect investors, until you realize, as The Wall Street Journal‘s Gordon Crovitz highlights, “[W]hereas in the past investors attested to their financial qualifications, the onus is now on companies to obtain potential investors’ tax returns or bank statements—information they’re understandably reluctant to share.”More poignantly, imposing a one-year penalty for getting any of these rules wrong “effectively means that a startup that violates any of these rules is likely to be put out of business,” as Wilson suggests, given the pace at which startups raise funding.All of which means that the JOBS Act, intended to liberate startups to create more jobs and generate more wealth, will likely do little of either. In fact, the added regulations, still under public comment, could make things worse. Much worse. As such, you can make your voice heard by submitting comments here. Massive Non-Desk Workforce is an Opportunity fo… 3 Areas of Your Business that Need Tech Nowcenter_img Related Posts IT + Project Management: A Love Affair Cognitive Automation is the Immediate Future of…last_img read more

Brazilian with German Olympian’s heart runs race of her life

first_imgBrazilian Ivonette Balthazar, 67 (C), who was submitted to a heart transplant one year ago, participates in a three-kilometre (1.9-mile) fun run alongside Copacabana beach in Rio de Janeiro, Brazil, on September 24, 2017. Balthazar got her heart from Stefan Henze, 35, a German Olympic canoeing team coach and winner of silver in the 2004 Athens Olympics, who died in a car accident. AFPBrazilian Ivonette Balthazar felt jittery ahead of a Rio de Janeiro road race Sunday, but her heart — transplanted from a German Olympian a year ago — spurred her on.In the midst of a long recovery from a transplant operation last year, the three-kilometer (1.9-mile) fun run alongside Rio’s Copacabana Beach seemed like a marathon to 67-year-old Balthazar.ADVERTISEMENT That heart, though, wouldn’t let her sit back.“The heart of an athlete beats inside me, the heart of a young person,” she said at the start line. “This heart demands more from my body than I was used to.”FEATURED STORIESSPORTSWATCH: Drones light up sky in final leg of SEA Games torch runSPORTSSEA Games: Philippines picks up 1st win in men’s water poloSPORTSMalditas save PH from shutoutSo, dressed in lycra and purple running shoes, with the number 2799 and a big red paper heart pinned to her shirt, Balthazar set slowly off with hundreds of other competitors down the famous seafront.Only 13 months ago, while her home city was hosting the Olympics, Balthazar faced imminent death. Fire hits houses in Mandaluyong City Frontrow holds fun run to raise funds for young cancer patients  Brace for potentially devastating typhoon approaching PH – NDRRMC Nonong Araneta re-elected as PFF president Sparks avoid collapse, beat Lynx in Game 1 of WNBA Finals Trending Articles PLAY LIST 00:50Trending Articles05:18After the Typhoon Part 200:59Sports venues to be ready in time for SEA Games01:37Protesters burn down Iran consulate in Najaf01:47Panelo casts doubts on Robredo’s drug war ‘discoveries’01:29Police teams find crossbows, bows in HK university01:35Panelo suggests discounted SEA Games tickets for students02:49Robredo: True leaders perform well despite having ‘uninspiring’ boss02:42PH underwater hockey team aims to make waves in SEA Games Kammuri turning to super typhoon less likely but possible — Pagasa LATEST STORIES Feels like goldAlthough she has regular physiotherapy at the hospital, the race was Balthazar’s first major unmonitored physical outing.Nervous about how she’d hold up, she decided to walk, not run.But Balthazar grew visibly more confident, her pace increasing until she moved at a brisk stride. Tears of joy welled up when she reached the halfway mark — then flowed at the finish line.Even on the happiest days, Balthazar is aware of the inseparable sadness, often thinking of Henze’s family.She’d love to meet his mother, “to hug her and thank her,” Balthazar said, mindful however that this might be too upsetting for his relatives.While she celebrates daily victories, “on the other side there is an entire family crying,” Balthazar said.So she does her best — for herself and for her silent partner.“The two of us are here,” Balthazar said.After the race, she embraced her own elderly mother, her daughter and grandchildren, before posing for photos with the race medal around her neck.center_img LOOK: Loisa Andalio, Ronnie Alonte unwind in Amanpulo for 3rd anniversary Her heart — ravaged by smoking, years of stressful work at her human resources agency, and a heart attack in 2012 — registered barely 40 beats a minute. Although she’d risen to the top of the waiting list for a new heart, it seemed too late.Then on August 15, 2016, she got a call from Rio’s heart hospital, the Instituto Nacional de Cardiologia.Stefan Henze, a German Olympic canoeing team coach and winner of silver in the 2004 Athens Olympics, had died in a car accident — and Balthazar was assigned the 35-year-old’s heart.Ever since, she says she and Henze have become a team of sorts. On Sunday, she put that partnership to the test.“If I didn’t have this heart, I wouldn’t be running,” Balthazar said. “This race today is a challenge for me — and for him.”ADVERTISEMENT MOST READ Anyone finishing could pick up a medal — but it really meant something to Balthazar.Copying a gesture often seen on Olympic podiums, she bit down playfully on the metal prize.“This is a gold medal for me,” she said. Read Next E.T. returns to earth, reunites with grown-up Elliott in new ad  BSP sees higher prices in November, but expects stronger peso, low rice costs to put up fight Don’t miss out on the latest news and information. View commentslast_img read more


first_imgIt is no secret that the Pacific Highway is one of the most notorious stretches on road in Australia. Touch Football Australia would like to remind all of those travelling to Coffs Harbour for the event to take extreme car on the road. An ABC report this morning said that six people have died in the past nine days on the Pacific Highway between Macksville and Grafton. The Coffs Harbour City Council also informed me that since 2000, 55 people have died in road accidents in the region. So please, when travelling to and from the event, make sure that your drivers are awake and in a suitable state to drive, keep to the speed limit and drive with caution. lease remember the history of accidents on the road and do everything you can to ensure you make it to Coffs safely.last_img

10 months agoReading defender O’Shea offers advice to Man Utd ace Pogba

first_imgReading defender O’Shea offers advice to Man Utd ace Pogbaby Paul Vegas10 months agoSend to a friendShare the loveReading defender John O’Shea says the jury should still be out for Paul Pogba and his revival at Manchester United.Ahead of today’s FA Cup tie, O’Shea believes the midfielder must now discover consistency.”I remember Paul from the youth team. He was so bubbly, everybody knew he was a fantastic talent. He will be a huge star for United because there’s that ability. And once he concentrates on that, he’ll be a fantastic player for years to come. He won the World Cup, so he’s doing enough talking on the pitch, but he’s got to make sure he keeps doing it.”The best players maintain that level consistently season after season, and the attributes that he has, if he can maintain that, he will become like he’s showing at the minute — that player who scores goals, creates goals. And if he does that I’m sure the United fans will get right behind him.” About the authorPaul VegasShare the loveHave your saylast_img read more

a month agoMan City boss Guardiola: Our attack was ruthless

first_imgAbout the authorPaul VegasShare the loveHave your say Man City boss Guardiola: Our attack was ruthlessby Paul Vegasa month agoSend to a friendShare the loveManchester City boss Pep Guardiola praised his players after their record-smashing 8-0 triumph over Watford.The Premier League Champions headed into half-time with a 5-0 lead, sensationally established in the opening 18 minutes of the game, and continued where they left off to add three more after the restart.Guardiola expressed his delight that his team did not let up, adding that doing so would have been disrespectful to the Hornets.”The quality of players upfront made the difference,” he said. “We were ruthless in terms of five shots, five goals. Sometimes, we have 20 and cannot score.”After the Champions League – a huge trip and no time to prepare – it was a lovely day for us all. For the City fans, there was sunshine and a lot of goals.”One of the things I loved the most is the fact that at 5-0 at half-time, sometimes players think for themselves and play their own game. It was the complete opposite – we were more aggressive, and we changed the set-up a little bit. We were more aggressive, high pressing.”In the second half, we scored more goals and played well. That, I like a lot.” last_img read more

Rep Hooker honors Brown Elementary for receiving national Blue Ribbon award

first_img16Nov Rep. Hooker honors Brown Elementary for receiving national Blue Ribbon award BYRON CENTER – Rep. Tom Hooker joined with students, teachers and administrators at Brown Elementary School today, celebrating the school’s Blue Ribbon award for “School of Excellence.”“This is a testament to the hard work being done by the teachers, administrators and students at Brown Elementary,” Rep. Hooker said. “I’m proud to have been a teacher in the same Byron Center school district for 37 years and it’s encouraging to see the success in the classrooms has continued to this day.”The national Blue Ribbon program is sponsored by the U.S. Department of Education, honoring public and private schools for overall academic excellence or progress in closing achievement gaps. Brown Elementary School also was honored in Washington, D.C., on Nov. 9-10, picking up the award during a Blue Ribbon celebration that preceded today’s local events. Categories: Newslast_img read more

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