Month: March 2015

StarShop Prelaunch Lunch in West Hollwood

This is the official video of the StarShop Prelaunch Lunch in West Hollwood.

Angel Investors Network is very fortunate to be apart of StarShop that was founded by AIN’s business partner Kevin Harrington. Stars and Hollywood execs all checking out the deal. AIN believes StarShop will be a household name in the next 12-24 months! #MakingHistory

 

SEC: Startups Can Now Raise $50 Million in ‘Mini IPO’

The SEC on Wednesday approved game-changing final rules in the implementation of Title IV of the JOBS Act, known as “Regulation A+,” which will allow small businesses and startups to raise up to $50 million from “the crowd.”

As I reported more than a year ago, this little-known provision of the JOBS Act will allow a startup company or emerging business to hold a “mini IPO” from the general public, not just accredited investors, and should be a complete game-changer for the way businesses are funded.

When Congress passed the JOBS Act in April 2012, Regulation A+ was an attempt to fix Regulation A, a rarely-used provision of federal law that allowed companies to raise up to $5 million in a public offering. Regulation A was a bust because it required the company to register its offering in each state where it was to be sold. The cost of complying with each state’s “Blue Sky Law” was exorbitant, compared to more commonly used laws such as Regulation D that allowed a company to raise the same amount of money, or more, without having to pay for expensive state-by-state compliance.

Under the SEC’s new rules for Regulation A+, the amount that could be raised increases to $50 million and the need for state compliance has been eliminated. More importantly, Regulation A+ allows those funds to be raised from the general public, not just accredited investors like with Regulation D offerings.

The question that had everyone in the crowdfunding world holding their collective breath was simple: Would the SEC keep their proposed rules intact when its leadership voted, or would they succumb to the pressure of state securities regulators who were adamantly opposed to lessening of restrictions for their own selfish financial reasons? The answer is that the SEC stuck by their guns and allowed companies to raise Regulation A+ without having to go to each state and spend a fortune registering their offerings.

Another important issue the SEC decided involved who can invest in these offerings. The JOBS Act limited Regulation A+ offerings to “qualified investors” which led some to argue that only “accredited investors” would be allowed to invest. Accredited investors are those individuals who earn more than $200,000 per year or have a net worth of greater than $1,000,000. However, the SEC broadly defined the term “qualified investors” under Regulation A+ to allow anyone to invest, albeit with some limitations as to the amount.

For those worried about protecting investors from fraud, Regulation A+ only allows investors to invest 10 percent of the greater of their annual income or net worth in these securities. The SEC has also implemented other strong investor protections such as “bad actor” background checks on the companies offering the securities, and disclosure of the company’s financial information as part of the offering.

The Regulation A+ rules can be read in full here. There are hundreds of pages, so get ready for a long read or a fast way to bore yourself to sleep. Having read the entire thing, I can tell you with confidence as a crowdfunding attorney that Regulation A+ has a chance to dramatically change the way small and emerging businesses raise capital in America.

The rules released by the SEC today now have to be published in the Federal Register before they become law, which takes about 60 days. As soon as that happens, entrepreneurs will have the ability to raise millions of dollars from “the crowd” in a simplified and comparatively affordable offering using Regulation A+.

Shark Tank Investor, Kevin Harrington Invites YOU To Join Angel Investors Network

Kevin Harrington one of the original sharks from Shark Tank and the inventor of the infomercial invites you to join Angel Investors Network. http://angelnetwork.com

Angel Investors Network (AIN) was created by a group of successful entrepreneurs, investment bankers, angel investors, marketing and management experts, lawyers and accountants who have built companies in a diverse set of industries.

AIN offers investors an opportunity to participate in the buying and selling of businesses, making equity investments, and providing debt financing to businesses with the opportunity of managing risk and creating wealth.

AIN also works with investors, marketing strategists, management experts and financial gurus who combine their skills and experience to work with our target entrepreneurs and make them highly successful business owners.

We are more than just Angel Investors. We are a community of experts that invest our time, expertise, and money in exchange for equity with the objective to perpetuate free enterprise, capitalism and support the entrepreneur spirit while creating wealth, happiness and fulfillment for all those involved.

Scroll to top