Publisher: Reuters Author: Sarah Lynch Dallas Mavericks owner Mark Cuban took a swipe at the…
Why You Need to Pay Attention to General Solicitation
In a Techcrunch article published on Saturday, September 21st, 2013, authors Naval Ravikant and Kevin Laws, the CEO and COO of AngelList, detail how lifting the General Solicitation ban can affect how startups effectively fundraise.
Prior to the ban being lifted, it had been illegal to announce that you have an investment opportunity and are soliciting investment funds. Now that the lift of the ban is effective on Monday, September 23rd, 2013, the startup investment environment will become a noisier and crowded than ever before. Companies engaging in general solicitation are now required by law to ensure their investors are accredited. The SEC has remained ambiguous on the exact requirements for companies to perform due diligence on investor accreditation status, maintaining that companies should take “reasonable steps”. For more detailed information, click here to access the Techcrunch article.