News & Events > News > Tonkon Torp’s Business Lawyers Address Confusion About Crowdfunding and General Solicitation Rules
Tonkon Torp’s Business Lawyers Address Confusion About Crowdfunding and General Solicitation Rules
Attorneys from Tonkon Torp’s Entrepreneurial Services practice group recently helped clients and other business people better understand how to take advantage of equity-based “crowdfunding” and general solicitation to raise capital without running afoul of existing securities laws.
Lawyers Claire Brown and Drea Schmidt presented “Crowdfunding: Forging Ahead,” a breakfast briefing that addressed misconceptions about new and pending SEC rules for certain new business equity financing mechanisms created under the Jumpstart Our Business Start-ups Act, better known as the JOBS Act.
Crowdfunding refers to raising capital by selling securities to ordinary investors using the Internet and social networking sites. While it will eventually permit entrepreneurs and small businesses to raise up to $1 million per year in this manner, final SEC rules related to crowdfunding are not yet in place. The new general solicitation rules will allow companies to use advertising to raise an unlimited amount of capital from any number of accredited investors, as long as companies comply with certain other rules.
Tonkon Torp’s Entrepreneurial Services attorneys help entrepreneurs lay a financial and structural foundation for success, providing advice on issues ranging from entity formation and governance to capital raising, intellectual property protection, tax and regulatory compliance.