CAPITAL RAISING DEVELOPMENTS FOR QUALIFIED OPPORTUNITY FUNDS
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“ FINDER FEES ” MIGHT SOON BE LEGAL TO PAY
Accredited investors participating in a Reg CF offering will not be subject to the same investment amount limitations that non-accredited Reg CF investors are subject to .
subject to . By increasing the overall amount that an issuer can raise in Reg CF offerings , and the amount that can be raised from accredited investor participants , Reg CF is a much more vibrant option for project investments well suited to mass marketing . The new rules do not stop there – the SEC has also increased the amount an issuer can raise in offerings under Rule 504 , a federal exemption available if the offering complies with state law , from $ 5 million to $ 10 million ; and Regulation A Tier 2 , an exemption with robust disclosure and reporting requirements , from $ 50 million to $ 75 million .
Encouragingly , it may also soon be permissible to pay so called “ finders fees ” to those who make introductions to capital sources without the finder or the issuer violating the brokerdealer registration laws . No rule on that subject has been adopted , but the SEC is seeking comments on a proposed framework that would allow finder ’ s fee payments if there are written agreements in place and adequate disclosures made to relevant parties . Entrepreneurs and their attorneys have long lamented the absence of a useful exemption for what many see as a crucial part of the entrepreneurial ecosystem . The proposed framework could finally give some well-received news .
ISSUES FROM RAISING EQUITY WITH CROWDFUNDING SOURCES
Over the past year , we have seen more sponsors approaching crowdfunding sources to raise capital gain equity . Crowdfunding , a term that is often informally used to describe offerings using general solicitation including Rule 506 ( c ) and Reg CF . Crowdfunding , in its informal sense , is an alternative approach to funding a project or venture by raising small amounts of money from a large number of people using advertising or other marketing normally prohibited by more traditional exemptions . Investors in a crowd-funded fund
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