Ban Overturned on Publicly Advertising You Are Raising Capital

Ban Overturned with SEC from The Startup Garage
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Raising Capital? Shout It From the Rooftops!

The Securities and Exchange Commission (SEC) voted to overturn the ban on “general solicitation” or publicly advertising that your company is raising money.  As a result, the SEC has deemed it legal for private companies to tell anyone that they are raising money, which was previously illegal.

How This Effects Startups

The lifting of the ban is expected to have a huge effect on entrepreneurs and startups by allowing them to reach a much broader audience.  Previously, an entrepreneur could not tell a newspaper that it was seeking funding.  They had to quietly and privately deal with a very small group of investors who had free rein over deal flow.

By allowing entrepreneurs to publicly advertise that they are fundraising will open the private market to a significantly broader pool of investors.  One of the more substantial sources of capital that this regulation will affect comes from crowdfunding.  Companies are legally allowed to sell equity in their company to accredited investors (and in some cases un-accredited investors) which will drastically increase entrepreneurs access to capital.  For more information regarding the amendments to the private offering rules from SEC visit this link.

With the solicitation ban lifted, more investors will know about startups they can invest in.  While there is certainly a lot of benefit for entrepreneurs and startups, many are calling for the need to add regulation to reduce the risk of fraud and other undesirable outcomes.


Whether you have a question about Publicly Advertising or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

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About Tyler Jensen

I work with entrepreneurs who are looking to attract investment and get out of the "Garage". I am passionate about helping entrepreneurs start companies that matter. I helped launch over 100 Companies, Non-Profits and Social Enterprises. I consider myself a serial entrepreneur, startup coach & trusted advisor. * Launching New Companies (For Profit, Non-Profit and Social Enterprise) * Expert Business Plan Writer * Extensive Network of Business Relationships focused on Launch & Rapid Growth of New Companies * Startup, Growth, Marketing, Technology, Web, Business Systems * Trusted Advisor to CEO’s & Entrepreneurs * Capital Raising Strategy Development * Startup Team Development The first company I started and sold is VAVi Sport & Social Club which grew to over 25,000 members in six years, was recognized as San Diego’s 30th fastest growing private company in 2006 by the San Diego Business Journal and 32nd fastest in 2007, and sold for over 25X the capital investment.