Thanks to President Obama’s JOBS Act, start-ups can now generally advertise that they are looking for investors starting today.
Advertising and solicitation can be in print, over the Internet or in any broadcast medium, such as television or radio.
Joe Wallin, a partner in the law firm Davis Wright Tremaine, posted on his Startup Law Blog that prior to this significant change, entrepreneurs were limited in whom they could speak with regarding potential investments in their firms. And entrepreneurs typically go back to existing investors for additional funding. The change allows these individuals to reach out to new potential investors, and even publicly acknowledge they are raising money in response to media inquiries.
Jeffrey Hollender, a life-long entrepreneur who took environmentally safe household products firm Seventh Generation public and then private again, is one of a group of individuals who worked to get change effected.
“I think it opens the possibilities even wider. I might have 1,000 contacts on LinkedIn that I can’t use under the old rules. Under the new rules, it will make it easier for entrepreneurs to raise capital.…This was needed to get the economy going. I hope the new rule also helps to create additional jobs,” Hollender said.
Solicitations on Kickstarter don’t fall within the Securities and Exchange Commission rules, since those providing contributions are receiving products and not securities in exchange for the donations.
A client alert from the law firm Morrison Foerster said that while the prohibition against general solicitation in certain private offerings of securities has been relaxed, the rules governing potential buyers of securities meeting the “accredited investor” requirements are still in place.
Currently, accredited investors generally need to have annual income of $200,000 a year for the last two years or have $1 million in net worth, excluding their primary residence.
Rory Eakin, cofounder of equity-based crowd-funding site CircleUp, said while the change “empowers individual investors,” his firm still has the advantage in that it “provides a service that makes it easier for investors to locate information” to do their due diligence on prospective investments.
Nicole O’Rourke, the chief operating officer of Rock Your Hair, said her firm is using CircleUp as its primary means of finding investors despite the rule change. That’s because CircleUp vets the investors on its site.
“We wanted to raise money working with a registered broker. Doing it correctly is important to us.…If we sell securities to an unqualified and nonaccredited investor, we’d get into trouble with the SEC. The rules regarding net worth and whether they are considered qualified is not what we do. CircleUp does this for us, and they take on the liability of doing the checks,” O’Rourke said.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
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"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye