Weekend Read: WSJ Accelerators Post on Pitch Events and General SolicitationBy http://profile.typepad.com/1237764140s22740 // September 28, 2013 in Angel platforms, Angels, General Solicitation, JOBS Act, Reg D, Seed Financings, Social Media, Startups
This weekend please read an article I wrote for The Accelerators blog of the Wall Street Journal, The Trojan Horse of Accredited-Investor Verification.
The piece gets into how some angel groups, pitch event promoters, and demo day organizers are dealing with new Rule 506(c). Basically, the days of a de facto industry practice of ignoring the Rule 506 prohibition on general solicitation and general advertising are over.
Now that it is okay to generally solicit, it's also time to come to terms with what came part-and-parcel with such over permission: the need to take reasonable steps to verify the accredited status of all purchasers.
It's going to take some time for the ecosystem to sort things out.
Check out this Pando Daily post that Doug Cornelius quoted from in his weekly roundup post. Do you think the newly conservative steps demo days promoters are taking, as recounted by the Pando Daily reporter, Erin Griffith, cut the mustard?
Please do read the piece for the WSJ Accelerators!
Photo: D Services / Flickr.