Feeling helpless about the new proposed rules for startup financing?By http://profile.typepad.com/1237764140s22740 // July 27, 2013 in General Solicitation, JOBS Act, Reg D, Seed Financings, Startup Law 101
This morning, the leader of a Seattle group active in the seed financing / startup contest space emailed me to ask that I outline three to five things people in the startup ecosystem can do, to impact the rulemaking the SEC has started to change Reg D. (If the changes are made final in the form proposed, they would completely overhaul Reg D and probably at least quadruple legal compliance costs for seed financings.)
Below is an adaptation of the email reply I sent him a few minutes ago.
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Here are the top four things people can do:
1. Get a basic grounding in the topic.
I can think of three or four independent ways to go about this:
(a) For some people, just taking the hour or two required to read through the actual text of the SEC release with the proposed rules, that might be the best. Let me see if I can identify which particular section of the release might be the most pertinent.
(b) Every few days on his blog, Joe Wallin writes about this topic. Joe's posts are both passionate and absolutely authoritative as to what the proposed rules say. http://www.startuplawblog.com/
(c) People can read my posts on the topic under the category tag "general solicitation." http://www.wac6.com/wac6/general-solicitation/
(d) People can refer to and follow the links found on http://saveregd.org
2. After getting some familiarity with the topic, people can and should leave comments on the official SEC comment webpage. THIS IS THE MOST IMPORTANT STEP. The SEC staff read the comments. Usually, entrepreneurs and individual angels do not leave comments. Comments are usually left by banks, big financial institutions, institutional investors, etc. You get the picture.
3. Spread the word.
4. Tell your representatives in Congress you are concerned that the agency is undermining the very goal of the JOBS Act, which was, as the acronym suggests, to jumpstart America's business startups.