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Privately held operating company issuers (as distinguished from private funds) should plan ahead if they intend to use general solicitation for Rule 506(c) offerings after September 23, 2013. Here is a preview of the considerations that issuers may want to keep in mind:
- From the outset, obtain all of the information required to identify whether there are any bad actor disclosures that are required to be made in connection with a Rule 506 offering, and if so, determine how and when those disclosures will be made to investors.
- Determine whether you will structure your offering as a Rule 506(c) offering (using general solicitation, and no non-accredited investors) or a Rule 506(b) offering. This decision should be made taking into account the company’s overall funding strategy. If the offering will be structured as a Rule 506(c) offering, is there a “finite” offering period, or will the issuer be engaged in a continuous effort to raise funds over a period of time?
For the full list of reminders for issuers, click here for more details.