Wait… That can’t be true, can it? The securities laws say you can’t advertise the fact you are looking for capital financing for your business or commercial real estate project unless you are doing an initial public offering, right?
Well, the times, they are a-changin’…
The new securities regulations that went into effect for 2021 now provide businesses, entrepreneurs and commercial real estate developers with two (2) new rules that explicitly allow you, under strict rules to be sure, to advertise the fact you need capital financing before you ever elect one of the registration exemptions under the Securities Act of 1933.
SEC’s Version of Shark Tank: Game On!
Among other rules, the SEC created a new rule called Rule 148 that allows issuers (that’s you – the person/company seeking the capital financing) to participate in a “Demo Day” presentation sponsored by a qualified Demo Day sponsor entity (we hope you use Rainmaker Analytics) where the issuer can showcase their proposed business and financing to qualified investors. The Demo Day sponsor is allowed to broadly advertise these events to attract qualified investors and run them virtually.
Your Input is My Chance to Negotiate
Yet another new rule is Rule 241 that allows the issuer (again, think you) to have “communications” and “input” to and from qualified investors, including distributing business plans and proposals for capital financing before the offering exemption is filed. Again, there are strict rules to follow, yet I define “input” and “communications” as “negotiations”. Negotiations happen when a deal is in play.
The bottom line: these important new rules and changes to the crowdfunding regulations put the odds ever in your favor.
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