Tag Archives: capital market

IPOs Using JOBS Act Benefits

L&WHdgUS IPOs are taking advantage of provisions of the JOBS Act, introduced two years ago,

  • to submit a confidential filing, initially, and
  • to “test the waters”.

Latham & Watkins, the law firm, has prepared the attached report to review the use of the JOBS Act provisions during its second year.

Current Reg A Offering Rules

The post, Smaller Company Reg A Offering Rules Get Update, triggered questions about the current rules.

Fortunately, the SEC provided a readable summary (click here) which is a segment of the full SEC page (click here) on financing small businesses.

Deregulation of Small Private Company M&A

A Bill that would largely deregulate the M&A business for smaller private companies (defined as those with EBITDA of $25 million or less) has passed the House and is now before the Senate.

The proposed rule change would enable unregistered advisors to assist the owner of a smaller private company to sell the owner’s business.  

In a coincident development, the SEC has issued a “no action letter” permitting unregistered advisors to assist private companies in M&A transactions.  As is pointed out in the linked post from Faegre Baker Daniels, however, state laws may conflict with this new SEC position (and the pending legislation).

The M&A business for smaller private companies has, in my opinion, always been a bit “the wild west” where unregulated advisers could operate openly for years without penalty.  This proposed rule change, therefore, may not trigger a fundamental change in behavior.  Rather, it may formally permit what is effectively the “status quo”.

What this proposed change would not permit, however, is for an unregistered advisor to assist in an increasingly common engagement structure in which the adviser pursues both capital and M&A options.  Often business owners will pursue parallel deal paths to determine the relative values to them of each alternative before making a decision.  The rules surrounding registration of advisors who are raising capital for smaller private businesses is unchanged under this proposed legislation.

Click here to read a Forbes article for more background.

Click here to read a post on this topic by the law firm, Faegre Baker Daniels.

Smaller Company Reg A Offering Rules Get Update

LanceImageLance Kimmel, a well-regarded attorney and head of SEC Law Firm, provides us with this helpful summary of key developments that should make Reg A offerings more useful again.

Following the mandate of the Jumpstart Our Business Start-Up (JOBS) Act, on December 18, 2013 the Securities and Exchange Commission proposed rules to amend largely forgotten and little-used Regulation A.

Having received far less attention than either of the other two major equity raising initiatives under the JOBS Act, general solicitation of accredited investors and equity crowdfunding, the revisions to Regulation A may well be the most far-reaching of the JOBS Act reforms. Informally known as “Regulation A+”.

Click here to read more on Capital Market Alerts.

SEC Proposes Eased Crowdfunding Rules

The SEC has proposed new crowdfunding rules which would dramatically expand the potential pool of investors.

Click here to go to read more at Monarch Bay’s website.

By Dennis McCarthy

SEC’s Forum on Small Business Capital Formation

SECLogoThe SEC’s annual forum on small business capital formation, which has become an important forum for ideas and discussion, will be held on November 21st.

Thanks to Morrison & Foerster LLP  for the alert.

Click on the link below or copy and paste the link into your browser.


By Dennis McCarthy

Monarch Bay’s New JOBS Act Posts

Monarch Bay Securities (mbsecurities.com) has initiated a new series of posts on the latest developments on JOBS Act funding.

Click the link to go to the first post, “Hold the Celebration!” and sign up for all the latest posts.

By Dennis McCarthy