• Jenny Kassan
    Jenny Kassan answered May 26

    What do you think of Chat GPT's response to my query?

    There is a federal exemption for Demo Days but it is useless because it doesn't preempt state law. To legally do a demo day where the public is invited, even if the event fits under the Demo Day exemption, it will still be illegal to do public solicitation under state law (unless the offering is bei... more

  • Benji Jones
    Benji Jones answered Mar 5

    What does it mean to fail the Howey test?

    It means that the instrument/contract that is being assessed will be considered a "security" under applicable laws.  This means you will need to either register the offering of that security (with the SEC and applicable state regulators) or find an exemption for those registration requirements.... more

  • Sara Hanks
    Sara Hanks answered 12/17/2023

    Can my company do a Reg D offering at the same time we're raising a crowdfunding Reg CF offering?

    Yes you can do a Reg D offering concurrently with a Reg CF offering. However, you'd want to make the Reg D a 506(c), which permits general solicitation, because while concurrent offerings under Reg CF  and 506(b) are theoretically possible, it can get very complicated, especially because in the... more

  • ChatGPT BOT
    ChatGPT BOT answered 6/3/2023

    What are the estimated accounting and legal costs of an ongoing Reg CF offering of $5 million?

    The estimated accounting and legal costs for an ongoing Regulation Crowdfunding (Reg CF) offering of $5 million can vary depending on several factors, such as the complexity of the offering, the location of the startup, and the specific legal and accounting services obtained. However, I can provide ... more

  • Sara Hanks
    Sara Hanks answered 2/3/2023

    Does the SEC need to first approve a Reg CF or Reg A+ deal before it goes live?

    Completely different process for the two sorts of offering.

    In a Reg CF offering, the Form C is filed with the SEC and the moment it shows up on the EDGAR system, the issuer can start accepting investment commitments on the intermediary's site. The SEC does not review or sign off in any way. That do... more

  • ChatGPT BOT
    ChatGPT BOT answered 12/19/2022

    What is the Howey test?

    The Howey test is a legal test used to determine whether an investment contract exists and, therefore, whether certain securities laws apply. The test is named after a U.S. Supreme Court case called SEC v. W.J. Howey Co., in which the Court set out a four-part test to determine whether an investment... more

  • ChatGPT BOT
    ChatGPT BOT answered 12/13/2022

    Could AI have an impact on the field of investment crowdfunding?

    Yes, it is possible that AI could have an impact on the field of investment crowdfunding. AI can be used to process large amounts of data quickly and accurately, which could be useful for analyzing potential investment opportunities and making predictions about their success. Additionally, AI could ... more

  • Devin Thorpe
    Devin Thorpe answered 11/15/2022

    Where should I incorporate a benefit corporation?

    @Brian Belley, @Jenny Kassan and @Sara Hanks, I wonder if you have thoughts about where to incorporate a benefit corp.

    ... more
  • David Duccini
    David Duccini answered 10/5/2022

    How are Self Regulatory Organizations like FINRA financially sustained?

    TLDR;  "Fees & Fines"

    FINRA is a purportedly not-for-profit membership based organization but their Revenue and Expenses are not easily discernible, at least not in public sources like CharityNavigator:


    FINRA likely generates the vast majority ... more