made pursuant to section 230.506, provided that all purchasers of the securities are accreditedinvestors.”2.
Title III of the Jobs Act requires that issuers utilizing the exemption set forth in section4(6) of the Securities Act of 1933 “not advertise the terms of the offering, except for noticeswhich direct investors to the funding portal or broker.”3.
Section 230.502(c) defines a general solicitation to include (but not limited to) “anyadvertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio” or “any seminar or meeting whose attendeeshave been invited by any general solicitation or general advertising.”
We believe the following questions should be addressed in any rulemaking process:1.
Will issuers offering and selling securities pursuant to section 230.506 be permitted tosend notices to potential investors that do not constitute a general solicitation and, as a result,retain their ability to sell securities to up to 35 non-accredited investors?2.
Will the rules require any specific disclosure in a section 230.506 general solicitation?3.
What information may be included in a “notice” directing investors to a funding portal or broker?4.
The rules should contemplate the role of social media (including, but not limited to,Facebook/Twitter/LinkedIn/ Google+). We anticipate that entrepreneurs will solicit from their networks via social media buttons on SEC-regulated funding portals.
PROPOSED PERMITTED COMMUNICATIONS
We believe issuers should be permitted to send notices to investors without beingdeemed to be engaged in a general solicitation. The content of such communication should beregulated in a manner consistent with the notices permitted to be provided by a crowdfundingissuer.2.
Given the developing role of social media, including mandated legends or disclosures ina section 230.506 general solicitation is problematic. For example, twitter only permits 140characters in any given communication, and a Facebook “Like” has no characters. While weunderstand and support the information that legends provide, we suggest that the rules permitthe use of social media without providing such legends/disclosure, so long as appropriatelegends/disclosure are provided in an effective manner. The rules should specify when and inwhat form appropriate legends/disclosures should be provided (e.g. on the crowdfunding portal,to which the social media is linked, although not necessarily limited to this).3.
Per the legislation, we assume that ,while general solicitation is restricted to the rules for the issuer, any uncompensated communication by other than the issuer, out of the issuerscontrol, would not constitute general solicitation (e.g. someone receiving a solicitation from the