1. Do the New SEC Rules on Investment Advertising Make it Harder for Incubators to Help Startups Raise Money?

    Interesting question. Here’s one angle on what the private offering advertising rules might mean for demo days and other such startup events hosted by incubators - from attorneys Trent Dykes and Megan Muir at DLA Piper:

    There has been concern about whether the implementation of the new final rules will have serious negative consequences for angel investing. Most notably, some worry that existing events such as demo days, business plan competitions and pitching to angel groups could be swept into the category of general solicitation requiring compliance with the Rule 506(c) restrictions. […]

    [Demo days and pitch events] can be structured differently to address the different legal implications of demonstrating a new product versus trying to raise funds.  Also, within the pitch events, there will be companies wanting to fundraise without general solicitation and those who decide to publicly try to raise funds. The differences among the types of presentations is where event organizers can help by paying attention to the general solicitation regulations and structuring events to provide appropriate environments.

    Keep reading: Demo Days, Pitch Events and the New Reg D»

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    More on the General Solicitation rule:

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    Find related commentary and analysis for Startups at JD Supra Law News»

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Notes

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