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A Notable Address For Small and Emerging Companies

Mar 8, 2016 | Entrepreneurs

“Buy when there’s blood in the streets, even if the blood is your own.” – Baron Rothschild

Small business SECIn late February, the Securities and Exchange Commission (SEC) Advisory Committee on Small and Emerging Companies met. The group discussed legislation and developments that are in line with the goals of small business owners, investors and other stakeholders. SEC Chair Mary Jo White delivered the opening keynote and provided a brief overview of the last year’s progress.

Here are some highlights from her address, from raising capital to ensuring the good standing of investors.


The ability to raise money publicly via internet investments has permeated business as we knew it. It’s been on our radar and we explored it recently in greater detail. Consequently, crowdfunding laws and rules are being amended to keep up with its popularity.

The Jumpstart Our Business Startups Act, or JOBS Act was passed into law in 2012. It requires the SEC to write rules and issue studies on capital formation, disclosure and registration requirements. Last year, the Commission completed its major rulemakings under the JOBS Act with crowdfunding in mind. With the crowdfunding rules set to be in effect May 16, White said that “in anticipation, a number of funding portals have filed with us to register to serve as intermediaries in crowdfunding transactions.”

Technologically speaking, this is especially good news. We want the best possible servers and portal providers to be able to legally and responsibly handle investors’ funds and transactions.

Crowdfunding also impacted a couple of other noteworthy rules.

Regarding Securities Act Rule 147, changes were proposed to handle intrastate offerings as part of an effort, as White said, to “assist smaller companies with capital formation, while maintaining investor protections.” The rule was modernized to stimulate state-based crowdfunding campaigns, which ultimately can be sold to residents of a particular state.

The proposal would also update Securities Act Rule 504 of Regulation D to permit offerings up to $5 million in a one-year period and would make it consistent with other provisions of the Regulation “by including a bad actor disqualification provision.” Currently the maximum allowable is $1 million. Now that public comments are closed, the SEC is reviewing recommendations for final rules for the Commission’s consideration.

Accredited Investors

Anyone who opens, or wishes to open its doors to potential investors and stakeholders should know that some steps were taken to identify qualified investors.

Defining and isolating an accredited investor is just as important as doing so for an accredited seller. The Committee urged the SEC, when establishing a definition, “to do no harm to the private offering ecosystem” by limiting the number of qualifying accredited investors. Once they are defined, the committee did want to make sure they pass a test of sophistication.

That Staff Report is up on the SEC’s site and analyzes different ways of establishing definitions and leaves room for modifications and revisions.

Check out the report and send them your feedback. This will impact whether or not someone’s money is any good.

Contact us to discuss how these updates impact your small business and capital raising.


Forming Your Company

Financing Your Company

Operating Your Company

Growing Your Company

Defending Your Company


Transactional and Corporate Law

Mergers and Acquisitions


I formerly worked as a satellite employee from my home state of New Jersey. I ended my employment with my former employer in 2016. In 2018, I was sued by my former employer for $1.1 million in Illinois State Court. I was referred to Brinen & Associates, LLC by a friend who is a client of the firm. Brinen & Associates, LLC came highly recommended. I contacted Joshua Brinen and then had a consultation at his office with his colleague Mark White. Together, Messrs. Brinen and White explained my options...

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