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Have there been any corporate lawsuits, class action or otherwise, against issuing companies from Reg CF investors? What is the likelihood of this occurring (if ever)? What about from Reg A+, Reg D investors - would that be more or less likely?
I am aware of several lawsuits (including class actions) relating to the early Reg A offerings that listed on Nasdaq.
As for Reg CF, there is a case of fraud being handled in bankruptcy court.
Reg D: these cases are unfortunately quite common, both from investors and regulators.
It's early days yet ... more
I am aware of several lawsuits (including class actions) relating to the early Reg A offerings that listed on Nasdaq.
As for Reg CF, there is a case of fraud being handled in bankruptcy court.
Reg D: these cases are unfortunately quite common, both from investors and regulators.
It's early days yet for CF. Class actions aren't worth it for really small offerings.
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How will the increase in the Regulation CF limit to $5 million per year benefit issuers?
Depends, how engaged are Issuers with their customers and communities?
Raising the limit to $5M is great for issuers whose "overnight success" has been in the works for the past 10 years. Its hubris or naivete to think that strangers are just going to flock to your deal/offering simply becau... more
Depends, how engaged are Issuers with their customers and communities?
Raising the limit to $5M is great for issuers whose "overnight success" has been in the works for the past 10 years. Its hubris or naivete to think that strangers are just going to flock to your deal/offering simply because it exist.
What the raise to $5M does is allow Founders who have been actively building their business, brand and community to offer their future Investomers more space on their rocket ship. Too, when Founders are able to onboard $2M - $3M in Investomer capital then all of a sudden their deal terms look a whole lot more attractive to the Sharks, Whales, Angels and VCs. The $5M limit is a Noah's Ark of investor's opportunity. An ark where Founders benefit because the its unlikely that Founder will create terms that are not fair to them, while being attractive to customers, fans, brand ambassadors and even Sharks.
Lastly, the biggest benefit for $5M raise is that it will give Founders more control of their businesses. Founders will be able to raise key early stage capital, on better terms, from fans/customers before having to even engage or be bothered by Sharks and Angels. Cause thats the thing. If you want money from a Shark, you've got to swim in their ocean, on their terms. Same thing with so-called "Angels". The best trick the devil ever played was rebranding himself as an investor; as "angels", VCs and Sharks all want the same 10,000X returns. Where as your customers? They want a consistantly good good, product or services AND maybe a reason to tell their network about your good, product or service.
So, yes. The biggest benefit of the $5M is that it gives Founders greater control of their destiny. Unless of course Founders are dying to meet Angels and Sharks....
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I'm very new to investments an startups. I'm behind on my updated progress with companies I've invested in through Republic. I just need to be pointed in the right direction to who could help me get up to speed with all 8 investments of mine? I'd appreciate the help greatly.
Hi Derrick,
If you invested on Republic.co, you should be able to check your investments if you:
1. Log in
2. Hover over your click the drop-down in the top right
3. Select "My Portfolio"
4. You can then click on any of your investments to read updates.
You can also hover over the lightning bolt nex... more
Hi Derrick,
If you invested on Republic.co, you should be able to check your investments if you:
1. Log in
2. Hover over your click the drop-down in the top right
3. Select "My Portfolio"
4. You can then click on any of your investments to read updates.
You can also hover over the lightning bolt next to your picture, which will display all the updates for companies you follow, have invested in, etc.
Hope this helps!
Best,
Brian
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What are the due diligence obligations of crowdfunding portals?
This question has been the subject of a lot of debate over the years since the JOBS Act was enacted. Some lawyers (and many platforms) take the view that their diligence obligations are limited to those set out in Rule 301 of Reg CF (make sure the issuing company tells you it has complied with its o... more
This question has been the subject of a lot of debate over the years since the JOBS Act was enacted. Some lawyers (and many platforms) take the view that their diligence obligations are limited to those set out in Rule 301 of Reg CF (make sure the issuing company tells you it has complied with its obligations, make sure there's a record-keeping mechanism, and make sure the company isn't disqualified by reason of the bad actor prohibitions). Others point to the provisions of Section 4A(c) of the Securities Act, which says "issuers" are responsible for any misstatements unless by exercise of reasonable due diligence they couldn't have known there was a misstatement, and provides that "issuer" includes anyone "selling" the securities. People in the limited-liability camp argue the portals aren't "selling" and thus aren't "issuers". The SEC says, under certain circumstances, portals may be liable for misstatements by issuers.
This debate may have become largely moot since the 2019 Supreme Court decision in Lorenzo, which provides a separate cause of action under Rule 10b-5 for anyone who "disseminates" a misleading statement. I cannot work out why this decision does not worry portals more.
The other liability provision that should concern portals is Section 9(a)(4) of the Exchange Act, a relatively new addition to that Act, which provides that liability for misleading statements extends to anyone who "willfully participates" in an offering.
In all these cases, liability can be addressed by undertaking due diligence to ensure that the statements made by a company are not misleading.
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Do you think the SEC went far enough with their recent changes to the definition of accredited investor?
No! Not at all. At least they didn't INCREASE the income and wealth requirements.
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What are the minimum revenues that a company would usually have before considering a "Slow PO" on OTC?
There are a number of pre-revenue companies that have gone this route. So the answer is there is no “Minimum” per se.
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