Also, this is just purely spam if you're just asking people to PM your for info. Also sounds shady.
I'm adhering to my attorneys advice, and NOT doing a general solicitation. For now I can only answer questions via PM to accredited investors only.
Sorry but this is a general solicitation. Saying or type "Seeking Investors" is general solicitation. It doesn't matter if you disclose information or not, it's simply announcing that you're seeking investment that is the solicitation. If you lawyer said that's it not solicitation I think it's time to get a new lawyer.
You're dead wrong.
Lets take angel.co for example.
On that site you can post details about your business,team,analytics, traction, and yes SOLICIT others to get involved in one way or another with your business.
What you
can't do is broadcast specific details about your companies fundraising deal at hand, which is why angel.co has a section for "accredited investors only" which
does display details about the companies fund raising status.
If what you were saying was true, people would not be able to network at a pitch contest, or communicate with interested parties after a teleconference presentation.
There's no law against networking with other accredited investors, what there is laws against advertising & or soliciting securities (general solicitation).
Anyone who's nice and PM's me will get the name of the business that I'm talking about right now...
Cheers
Alright, have it your way. Hope you file form D and comply with Rule 506(c)...
AngelList's public profile for companies provide no information whatsoever that the company is seeking investment. The public pages provide nothing more than some basic information about the company; location, name, founders, etc. Nothing in relation to an investment announcement. AngelList used to consist of investors stumbling upon companies, or being directed to the page by a company executive that had a personal pre-existing relationship with the investor. Now after the legalization of general solicitation AngelList has permitted companies to send investors offers; prior to the end of 2012, they did not. Trust me I've been on AngelList since 2011.
General solicitation is the announcement to the public in general way. A one-on-one conversation is not general solicitation. One-to-One discussions are not illegal... thus networking events are not either. If one were to have a seminar and get up in front of a crowd and say we're offering a chance for people to invest in our company... that is General solicitation. Where the General Solicitation laws come into effect is how many people an offering is going to at one time. You're lumping together General Solicitation and one-to-one solicitation; the latter is okay and always has been (technically speaking you still need to file "Form D" with the SEC though).
Also, when it comes to networking events. You can't actually take money immediately from an investor. You have to establish an existing relationship with the individual; usually a minimum of 30 days, before you can take their money.
Thus you posting on this website and offering an opportunity to a infinite collection of people is General Solicitation. If you were to go to a networking event a discuss this with one individual, then it would not be General Solicitation.
General Solicitation under Rule 506 Defined“General solicitation” or “general advertising” are undefined in the statutes or rules. Instead, the Securities and Exchange Commission (SEC) takes a case by case approach. Rule 502(c) prohibits:
any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over internet, television and radio; and
any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.”
In no action letters, the SEC has stressed the importance of the existence and substance of a “pre-existing relationship” with potential investors as a key indicator of determining if a communication is a “general solicitation” or constitutes “general advertising.” According to the SEC, the presence of a pre-existing relationship between an issuer and a potential investor is strong evidence that general solicitation or general advertisement has not occurred. The SEC declined to take enforcement action against issuers for any of the following actions:
Submitting a generic questionnaire to investors during the fundraising period, provided that the questionnaire did not specify or promote a particular investment, but simply questioned the suitability of potential investors. These investors cannot participate in any pending offering.
Providing password protected information on the Internet to potential investors who had already been determined by the issuer to qualify as accredited or sophisticated investors.
Speaking (including an interview to the media about a company so long as the discussion is generic in nature and does not reference any investment currently offered or contemplated.
Discussing a company or new product as long as no current funding initiatives or historical investment results are mentioned.
On the other hand, the SEC has indicated that it believes that the following actions violate Rule 502(c):
Mass mailings
Speaking to the media about a solicitation when funding or investment matters are discussed, whether such speech is directed at current fundraising efforts or deemed to be an attempt to “condition the market” by making reference to the success or attractive return of previous investments.
Print, radio and television advertisements or solicitations regarding funding or investment matters
Tombstone advertising (an ad which does no more than give the barest of information) is held by SEC staff to “condition the market” for the securities and therefore constituted an offer even though the tombstone did not specifically mention the transaction in question.
Source:
https://tollefsenlaw.com/general-solicitation-under-rule-506/ Basically, since you posted this you fall under Rule 506(c), instead of 506(b)... there's nothing wrong with that. The only issue is if you wanted to, you can't take money from non-accredited investors. 506(b) offerings give you the option to take money from upto 35 non-accredited. 506(c) removes that in exchange for general solicitation privileges.
Rule 506 on the SEC website:
http://www.sec.gov/answers/rule506.htm
