ChatGPT BOT answered Oct 12

    What is the difference between a Rule 506(b) offering and a Rule 506(c) offering?

    The difference between a Rule 506(b) offering and a Rule 506(c) offering under Regulation D of the U.S. Securities and Exchange Commission (SEC) follows:  

    1. Rule 506(b) Offering: 
       - Accredited and Non-Accredited Investors: In a Rule 506(b) offering, issuers can raise cap... more

  • Sara Hanks
    Sara Hanks answered Aug 15

    What are the most common ways that crowdfunding issuers can get in trouble with the SEC?

    The SEC has been relatively lenient with crowdfunding issuers (as opposed to crowdfunding intermediaries), possibly so as not to stifle this emerging industry, so as yet there is not really a "most common" way to get in trouble.

    They have brought a series of actions against companies raising under R... more

  • ChatGPT BOT
    ChatGPT BOT answered Aug 11

    Does the SEC provide any guidance on how to prepare the Form C for a Reg CF crowdfunding raise?

    The U.S. Securities and Exchange Commission (SEC) provides guidance and instructions for preparing Form C for Regulation Crowdfunding (Reg CF) offerings. Form C is the disclosure document that must be filed with the SEC and provided to potential investors in a Reg CF crowdfunding campaign.

    The SEC's... more

  • ChatGPT BOT
    ChatGPT BOT answered Apr 14

    Can an issuer run both a Reg CF campaign and a Reg A+ campaign at the same time?

    Yes, an issuer can run both a Regulation Crowdfunding (Reg CF) campaign and a Regulation A+ (Reg A+) campaign at the same time, as long as they comply with the requirements of both regulations.

    Reg CF and Reg A+ are both securities offerings that allow companies to raise capital from the general pub... more

  • Brian Belley
    Brian Belley answered Apr 9

    It is tax season. Does the US give any tax relief for investing in startups?

    Yes - the US offers tax relief for investing in startups through various provisions in the tax code, including Sections 1202, 1244, and 1045. 

    Section 1202 - Qualified Small Business Stock (QSBS): Investors in qualified small businesses can exclude up to 100% of their capital gains from federal... more

  • Jenny Kassan
    Jenny Kassan answered Apr 8

    How much can a non-accredited investor invest in crowdfunding? Are the rules changing on this?

    The limitation on how much a nonaccredited investor can invest during a 12-month period depends on his or her net worth and annual income:


    •       The greater of $2,500, or 5 percent of the greater of the investor’s annual income or net worth, if either the investor’s annual in... more

  • Brian Christie
    Brian Christie answered Apr 2

    What is required to become a crowdfunding Funding Portal under the JOBS Act?

    To become a crowdfunding funding portal under the JOBS Act, an entity must register with the Securities and Exchange Commission (SEC) as a "funding portal" and comply with certain regulatory requirements. Here are some of the key requirements:

    1: Registration: The entity must register with the SEC a... more

  • Jenny Kassan
    Jenny Kassan answered Mar 27

    Can funding portals do sales and marketing activities to solicit investors on behalf of the issuers on their portal?

    Unless the portal is a licensed broker-dealer, it may not offer investment advice or recommendations or solicit purchases, sales, or offers to buy the securities offered or displayed on its platform.

    It may however apply objective criteria to highlight offerings on its platform where: 

    (i) The ... more

  • ChatGPT BOT
    ChatGPT BOT answered Mar 21

    How is 506(b) related to crowdfunding?

    506(b) offerings are not typically considered to be a form of crowdfunding. Crowdfunding generally refers to a method of raising funds from a large number of people, often through online platforms, in exchange for equity or other forms of compensation.

    506(b) offerings, on the other hand, are privat... more

  • ChatGPT BOT
    ChatGPT BOT answered Mar 15

    What is the attitude toward private market access by the author of the following statement?

    The Commission should examine ways to expand their access to capital, but it should do so in a way that mitigates the risks posed by offering investors fewer or no protections.
    The author of this statement has a critical attitude towards private market access. They argue that retail investors lack th... more