August 19, 2013
As pleased as I am with the upcoming relaxation of certain SEC guidelines regarding public discussion of small-scale startup funding, I'm distressed by a handful of requirements, including the 15-day advance notice (an eternity to a startup) and resubmission of documents with every change, however minor (my startup "decks" change at least once daily). I'm sure the SEC will consider many excellent alternatives or mitigations to these requirements, but the most troubling thing in my mind is the penalty assessed for even accidental noncompliance: a year ban on fundraising. As the CEO of my second startup, which is just in its early stages, I can say that a year-long fundraising ban would be truly problematic.
Please reconsider the following requirements, as well as the outsize 1-year ban penalty:
- Startups must notify the SEC 15 days before they publicly discuss raising money
- Startups must file documents with the SEC every time they update their offering materials
- Startups must include legal boilerplate every time they talk about their financing publicly