Alternative investments are on the brink of a new era and Buy Side Design is collecting expert insights to share with an audience of seasoned finance professionals. Thanks to the JOBS Act and recent changes in regulatory structure, Hedge Funds have new choices with the methods they employ to raise capital. In this edition, Expert Securities Lawyer Leslee Cohen walks us through what is on her radar regarding the Top 3 JOBS Act Issues currently under reported in mainstream media:
If you slip up with respect to the requirements for compliance with the new exemption for general solicitation and advertisements in connection with private offerings, the penalty is a ONE YEAR ban on private fundraising. This could be the death sentence for your business. 1. If you slip up with respects to the requirements for compliance with the new exemption for general solicitation and advertisements in connection with private offerings, the penalty is a ONE YEAR ban on private fundraising. This could be a death sentence for your business.
Seeing your company’s advertisements for a money raise, which remains highly unusual given the very recent enactment of the provisions permitting such advertisements, may raise questions about your business’ financial health to customers, vendors and other third parties.
The verification method in Rule 506(c) that allows reliance on written confirmations from attorneys and certified public accountants is available even if the attorney or accountant is only licensed or registered in a non-U.S. jurisdiction.
A cottage industry of businesses that will verify accredited investor status while guarantying the utmost privacy to investors will crop up soon and grow rapidly to service companies that are engaging in fundraising through general solicitation as permitted under the new Rule 506(c) under Regulation D.