In the world of early stage investing, there exists a range of structures from the most founder friendly to the most investor friendly.
The most investor-friendly structure involves some type of a priced round in which...more
I had a chance to sift through Pitchbook’s U.S. VC Valuations Report for the first quarter of 2024. The data point that really jumped out at me was the increase in down rounds. The number of flat and down rounds as a...more
Identifying potential investors is one of the most difficult challenges facing early-stage companies. The range of amounts sought at this stage is typically greater than what could be provided by the founders and friends and...more
3/18/2024
/ Accredited Investors ,
Broker-Dealer ,
Capital Formation ,
Corporate Issuers ,
Early Stage Companies ,
Financial Industry Regulatory Authority (FINRA) ,
Finders ,
Investment ,
Investors ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Startups ,
Venture Capital
Judge Analisa Torres’ greatly anticipated Order in the SEC’s lawsuit against Ripple is a split decision. The Order basically finds that Ripple’s digital token XRP is a security when sold privately to individuals and...more
7/17/2023
/ Cryptocurrency ,
Digital Assets ,
Institutional Investors ,
Investment ,
Investors ,
Popular ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Smart Contracts ,
Token Sales ,
Unregistered Securities
A major theme of this Blog has always been ongoing legislative, regulatory and market initiatives to reform capital markets by targeting unreasonable or outdated impediments to capital formation to make it easier for...more
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here”. Such was the lament of John Ray, the legendary restructuring...more
12/20/2022
/ Commercial Bankruptcy ,
Corporate Governance ,
Crypto Exchanges ,
Cryptoassets ,
Cryptocurrency ,
Directors ,
Financial Services Industry ,
Investment ,
Popular ,
Securities and Exchange Commission (SEC) ,
Venture Capital
Just last week, special purpose acquisition company The Music Acquisition Corporation (“TMAC”) called a special meeting of its stockholders. It wasn’t the special meeting it originally envisioned. TMAC was launched in...more
What do founders, employees and investors in privately held companies all have in common? Limited opportunity to sell their shares. That’s because of various legal, contractual and market factors that impede the sale of...more
Elon Musk’s contentious relationship with the Securities and Exchange Commission is likely to become even more complicated as a result of Mr. Musk’s filings with the Commission to report his recent purchases of shares in...more
4/11/2022
/ Beneficial Owner ,
Elon Musk ,
Filing Requirements ,
Form 8-K ,
Investment ,
Passive Investments ,
Reporting Requirements ,
Schedule 13D ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Transactions ,
Securities Violations ,
Twitter
The Securities and Exchange Commission just proposed new rules to protect investors in private investment funds. The proposed rules would require private fund advisers to disclose certain information and avoid certain...more
2/22/2022
/ Accredited Investors ,
Investment ,
Investor Protection ,
Investors ,
Private Equity ,
Private Funds ,
Regulatory Oversight ,
Regulatory Reform ,
Rule 506 ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Venture Capital
Ever since the SPAC market exploded in late 2020 and early 2021, the SEC has sounded alarm bells through investor alerts, staff statements and public comments. In March of 2021, it warned investors not to invest in SPACs...more
Background: Crypto Catch 22 -
Followers of the SEC’s efforts to regulate digital tokens will recall former SEC Corp Fin Director William Hinman’s speech at the June 14, 2018 Yahoo Finance Conference in which he introduced...more
10/18/2021
/ Blockchain ,
Cryptocurrency ,
Decentralized Finance (DeFi) ,
Digital Assets ,
Howey ,
Investment ,
Popular ,
Safe Harbors ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Virtual Currency
The Securities and Exchange Commission announced on July 13, 2021 that it settled fraud charges against a special purpose acquisition company, its sponsor, its sponsor’s CEO and its proposed merger target for making...more
7/26/2021
/ Capital Raising ,
Due Diligence ,
Enforcement Actions ,
Initial Public Offering (IPO) ,
Investment ,
Misleading Statements ,
Private Investment in Public Equity (PIPEs) ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Regulation ,
Special Purpose Acquisition Companies (SPACs)
At the 1932 Democratic National Convention, the live band at one point burst into “Happy Days are Here Again”, FDR’s favorite, drawing raucous cheers from convention delegates. It went on to become the Democratic Party’s...more
The Securities Exchange Commission expanded the definition of “accredited investor” by adding new categories of investors that have sufficient investment knowledge and expertise to participate in private investment...more
It’s no shocker that the Coronavirus pandemic has slowed down venture capital investment dramatically, with 2020 now on pace to be well below the high levels of the past couple of years. According to Pitchbook, VC deal flow...more
The impact of the Coronavirus and COVID-19 on venture capital investment will likely be similar to what we saw in the aftermath of the 2008 recession and the 2001 dot-com meltdown. VC investors will redirect their attention...more
Title III crowdfunding may be an attractive capital raising alternative during the current Coronavirus pandemic because it allows companies to use the internet to solicit potential investors and not be restricted to...more
On September 30, 2019, the Securities and Exchange Commission announced that blockchain developer Block.one had agreed to pay a $24 million fine to settle charges that it had engaged in an unregistered offering of securities...more
12/2/2019
/ Bad Actors ,
Blockchain ,
Capital Raising ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Enforcement Actions ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Investment ,
Offerings ,
Rescission ,
Section 5 ,
Securities Act ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Token Sales ,
Trading Platforms ,
Unregistered Securities ,
Virtual Currency
The corporate spectacle better known as The We Company IPO officially and mercifully came to an end September 30 when The We Company (“We Co.”), the corporate parent of WeWork, requested that the Securities and Exchange...more
10/7/2019
/ Anti-Dilution Terms ,
Business Valuations ,
Certificates of Incorporation ,
Corporate Governance ,
Dilution ,
Initial Public Offering (IPO) ,
Investment ,
Investors ,
Notification of Withdrawal ,
Office Space ,
Preferred Shares ,
Registration Statement ,
Share Price ,
Sharing Economy ,
SoftBank ,
Venture Capital
2018 was a historically good year for venture capital in the United States in terms of dollars invested by VC funds in U.S. companies, dollars raised by VC funds and dollar value of exits by VC-backed companies, according to...more
Last month, Secretary of the Commonwealth of Massachusetts William Galvin made good on his promise to conduct an exam sweep of ICOs in Massachusetts. On January 17, the Enforcement Section of the Massachusetts Securities...more
2/5/2018
/ Cryptocurrency ,
Digital Currency ,
Enforcement Actions ,
Financial Crimes ,
Initial Coin Offering (ICOs) ,
Investment ,
Popular ,
Regulatory Oversight ,
Securities Violations ,
Unregistered Securities ,
Virtual Currency
Venture capital funds routinely negotiate for a right of redemption – the right to require the company to buy out their shares after a certain period of time if an exit has not occurred – as a key element of their exit...more
On March 22, the Subcommittee on Capital Markets, Securities, and Investment of the Financial Services Committee conducted a hearing entitled “The JOBS Act at Five: Examining Its Impact and Ensuring the Competitiveness of the...more
The just completed IPO of Snap Inc. has received enormous buzz and plenty of press coverage, mostly about its eye-popping valuation and offering proceeds, the big winners among the founders and early investors and the...more
3/7/2017
/ Capital Raising ,
Emerging Growth Companies ,
Financial Institutions ,
Financial Markets ,
Initial Public Offering (IPO) ,
Investment ,
JOBS Act ,
Sarbanes-Oxley ,
Share Class Structures ,
Snapchat ,
Social Media ,
Voting Rights