August 29, 2013
Regarding certain comments opposing the proposed Advance Form D:
1. The notion that many startups would be "ignorant" of the proposed rule is no different than other requirements of starting a company or soliciting financing. Any serious startup company would retain an attorney before a general solicitation, and the attorney would be knowledgeable about the requirement.
2. Most startups know in advance how much money they intend to raise, so the Advance Form D would not require them to find information that they didn't already know 15 days before solicitation. The information required by the proposed Advance Form D is not onerous in the slightest - basic company contact information, who the directors and senior executives are and the intended potential raise amount being the main pieces of information. We fail to see how this presents a burden on a typical startup.
3. A startup doesn't have to use general solicitation 506(c) to solicit capital, but if they do and they want to access the general public, they should "let the sunlight in". There should be a higher standard of information sharing in order to solicit funds from the public.
4. Filing the Advance Form D would in no way expose the startup's business type, purpose, marketing plans, technology development plans or any other actionable information.