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Important Venture Capital Investment Tips to Live By
VerifyInvestor.com
Let's face it: venture capitalism is not for the faint of heart. Instead, it's so cutthroat that most venture capital funds fail. That's why the more successful venture capitalists tend to focus on allying themselves with the best firms and investing in the entrepreneurial diamonds in the rough. To that end, we’ve compiled five simple, straightforward tips for up-and-coming venture capitalists. Of course, venture capital is much more nuanced than essential advice can provide; however, think of these as a solid bedrock of everyday things to keep in mind.
Read MoreSEC Exempt Offering Framework Upgrade, Part 2
VerifyInvestor.com
In part one of this series, we discussed the SEC’s newly adopted amendments that fill in some important gaps in existing private placement laws while simplifying and improving consistency to improve transparency for issuers and investors alike. These amendments will take effect on January 2021, which is just around the corner. We reviewed changes to Regulation A and Regulation Crowdfunding, as well as non-exclusive safe harbors from integration. Now, let us examine additional key changes to Rule 504 of Regulation D, “Test-the-Waters” and “Demo Day” communications, eligibility requirements, and improvements to other SEC registration exemptions.
Read MoreSEC Exempt Offering Framework Upgrade, Part 1
VerifyInvestor.com
It’s common knowledge that growing small businesses and startups do not always have the crucial resources at their disposal to participate in the traditional securities registration process. Therefore, they tend to choose from among several registration exemptions offered by the Securities and Exchange Commission (SEC). On November 2, 2020, the SEC adopted amendments that simplify existing laws, enhance their consistency, and fill in gaps. The amendments take effect 60 days after their date of publication in the Federal Register.
Let’s take a look at a few of the highlights: changes to Regulation A, changes to Regulation Crowdfunding, and non-exclusive safe harbors from integration.
Read MoreNew Rules Effective on Dec 8 Open Private Markets to More Investors: SEC Expands “Accredited Investor” and” Qualified Institutional Buyer” Definitions
VerifyInvestor.com
Traditionally, most people have been unable to invest in the private placement market because alternative investments have generally been reserved for those considered by regulators to be wealthy enough to bear the risks. Such qualified entities and individuals, known as accredited investors, feed much-needed capital into the private placement market by participating in publicly solicited offerings such as Rule 506(c). Now, after 35 years of largely unchanged rules that qualify the investors in many private placement offerings, the U.S. Securities and Exchange Commission (SEC) has expanded the definitions of “accredited investor” and “qualified institutional buyer.” Adopted on August 26, 2020 and taking effect December 8th, 2020, the final rules add new investor categories that reflect the "financial sophistication" level of various individuals and institutions. We will now discuss more about these new amendments and how they may affect you, either as an issuer or an investor.
Read MoreFinding Accredited Investors Could Become Easier when Newly Proposed SEC Rules Get Adopted
VerifyInvestor.com
Raising small business capital has never been a simple process, and smaller issuers have relied largely on their networks to make it happen. That’s why the Securities and Exchange Commission (SEC) recently proposed rules that would allow natural persons called “finders” to accept compensation from issuers of SEC registration-exempt offerings as they seek to raise funds from accredited investors. Typically, such finders need to register as brokers under Section 15(a) of the Exchange Act, but the newly proposed rules would exempt them from this requirement under certain limited circumstances.
Read MoreCommission-Free Trading Apps: A Good Choice?
VerifyInvestor.com
The cost of trading stock has dropped drastically with the rise of digital platforms. Large trading firms have started providing no-fee stock trading options to retail investors, and in doing so, they’ve transformed the stock market. These firms have included TD Ameritrade, Charles Schwab, ETrade, and, of particular note, Robinhood, which reported more than 4.3 million daily average trades in March of 2020, as cited by Quartz.
Read MoreAnt Group - A Guide to China's Largest Fintech Company
VerifyInvestor.com
Late on October 29, 2020, the Chinese fintech firm Ant Group told The Wall Street Journal that mainland China’s investors had already ordered more than $2.8 trillion USD worth of shares in the company’s initial public offering. Simultaneously listed in Shanghai and Hong Kong, the IPO will likely be worth closer to $34.4 billion USD, or $39.5 billion USD if underwriters in both locations utilize their option to increase the offering by 15%.
Read MoreCapital-Raising Opportunity for Small Businesses: SEC Extends Amendments Loosening Regulation Crowdfunding Requirements
VerifyInvestor.com
Let’s face it: financing options for small businesses have been minimal, especially during the COVID-19 crisis. According to a recent SEC announcement regarding Regulation Crowdfunding, limiting factors include labor and supply chain disruption, investor behavior changes, and declining revenues in many industries. Also, according to data between May 16, 2016, and July 31, 2020, issuers with no revenues initiated 49% of the offerings, and only 11% of offerings were by issuers who reported a profitable fiscal year just before the offering.
Read MoreReg BI and Form CRS - New Rules Affect Relations with Broker-Dealers and Investment Advisers
VerifyInvestor.com
Adopted in June of 2019, Regulation Best Interest (Reg BI) and Form CRS are part of a broader framework of Securities and Exchange Commission (SEC) rules intended to foster straightforward, quality communication between broker-dealers or investment advisers and their retail investor clients, while still preserving both investor choice and service costs. Although firms have been working on compliance for much longer, June 30, 2020 was the official compliance date for both Regulation Best Interest and Form CRS. Whereas FINRA and the SEC don’t necessarily expect full compliance yet, they will be carefully reviewing certain key documents and internal processes of investment advisers and broker-dealer firms.
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