June 22, 2012
The concept in the Bill to allow general solicitation and advertising to the public is critical for a small business raising capital utilizing a Regulation D exemption. This feature to protect the exemption, when making a Reg D private placement offering to Accredited Investors in the general public, is an important component.
Prior to this Bill, a small business person is limited to their circle of contacts. The fees of investment banking firms and the size of their minimum offerings are often prohibitive. The general public does not see all of the quality offerings or do they have the opportunity to make their own decisions on where they want to invest their funds in private offerings. This Bill will provide a benefit for expanded access to capital for small business firms making offerings and the general public, accredited investors will benefit from seeing more offerings on a direct basis, only from the promotion of an investment banking firm and/or a broker/dealer firm.
The guidelines the SEC is drafting for the interpretation of these various components of the Jobs Bill is important. 95% of offerings are very legitimate deals from small business firms to evolve into larger firms and the end result is the creation of more jobs. America has been built on the expansion of small business firms and not the expansion of middle and large size firms. This is an opportunity to have an impact on jobs creation going forward and a very good Bill to allow this to happen.
The SEC needs to be an ally in the interpretation of this Bill and provide reasonable and simple guidelines so a small business person making its offering to the general public does not risk violating the Regulation D exemption due to misinterpretation. A small business person should not need an attorney to interpret the SEC guidelines, as suggested by the Bill for the SEC to provide.