General Solicitation for Startups

The SEC has finally issued proposed rules that would eliminate the prohibition against general solicitation and advertising in Rule 506 offerings. The proposed rules are good news for startups because they offer broader access to investment capital sources, and the SEC should be applauded for its reasoned and reasonable approach in the new rules.

There was a lot of handwringing and blog ink spilled over what the SEC might do with Section 201 of the Jumpstart Our Business Startups Act (the “JOBS Act”). Recall that the JOBS Act directed the SEC to amend Rule 506 of Regulation D to permit general solicitation or general advertising in offerings made under Rule 506, provided that all purchasers of the securities were accredited investors. Section 201 of the JOBS Act went on to require that the SEC’s rules require the issuer to take reasonable steps to verify that the purchasers of the securities were accredited investors, using such methods as determined by the SEC.

I have highlighted some of the most significant quotes and points from SEC Release No. 33-9354 below. Continue reading

Posted in Federal Law & Regulation, Startup Law, Startups | Tagged , , , , , , , | 13 Comments

Founder Institute

My colleague Christina Chan and I recently had the opportunity to interview Dave Parker of the Founder Institute. You can read our interview of Dave below. If you haven’t heard of the Founder Institute, it has been helping entrepreneurs in Seattle since 2009, and recently was the subject of a New York Times article. You can also find out more about Founder Institute at its website: fi.co.
If you have any questions for Dave, don’t hesitate to email him at: dave@dkparker.com. You can also read his highly informative and entertaining blog at http://www.foresttreesbark.com/. Continue reading

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Interstate Business Taxes

By Garry Fujita

Washington-based businesses tend to focus on Washington’s business taxes, because those taxes are typically the most relevant.  However, as businesses grow into interstate business activities, they can become subject to another state’s income tax jurisdiction … like California.  If a business is taxable in another state, then that state will typically apportion the interstate revenue to itself in a proportion that is determined by a formula.  This formula is a proxy for your activities in that other state that contributed to your interstate income.  The U. S. Constitution allows states to demand a tax that is fairly related to a taxpayer’s business activity in that state. Continue reading

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How to Hire an Advisory Board Member

How To Document the Retention of An Advisory Board Member

By Joe Wallin

Our clients frequently ask us this question: “We want to bring on an advisory board member. Can you help us?”

The answer is, “Of course, absolutely.” And here is what we tell them. Continue reading

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Social Purpose Corporations Explained

Are you concerned about how your company impacts society and the planet? As of June 7, 2012, a new form of business corporation – the social purpose corporation – is available in Washington that allows corporations to adopt charters that take into account values other than pure profit maximization in making corporate decisions. If you would like to learn about this new form of business entity–what it is exactly, how to qualify, and what are the benefits and burdens of being one–we are hosting an educational event to go through these issues. Continue reading

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