OEN News5 Things You MUST Know About the JOBS Act Before Raising Money

We’re pleased to bring you this guest post by Steve Morris, Executive Director of Oregon Technology Business Center (OTBC), which was recognized by the PSU Oregon Founders Study to be the highest-rated incubator for mentoring in the Portland area. He is a veteran of three investor-funded start-ups and two business-unit startups inside larger companies, and has more than 25 years of management experience in the software, service, and semiconductor test industries. 

Confused about new SEC rules? You’re not the only one. While the entire Jumpstart Our Business Startups Act (JOBS Act) has yet to come into effect, parts of it have, significantly changing the landscape for entrepreneurs trying to raise money for their companies.

Here are 5 things you MUST understand before raising money:

1. When raising money from investors, you need to proactively decide whether to make a public offering—or not.
2. If you decide to make a public offering, you can still only accept funding from accredited investors (at least as it stands today).
3. If you make a public offering, your investors cannot self-certify that they qualify as an accredited investor—you have to ask for much more intrusive proof than simply having them sign a form.
4.  If you don’t make a public offering, but instead only approach accredited investors, then when it’s time to accept the investment, the investor can self-certify that they are an accredited investor.
5.  There are proposed (not yet implemented) rules that will add reporting requirements and add rather dire consequences if you don’t follow the reporting requirements.

Why is this all important? Ready to learn more?

Watch this video blog-post, and see highlights from our January PubTalk, “Will My Fundraising Efforts Get Me In Trouble with the SEC?”—where three local lawyers will give you the real scoop!