Policy regarding new SEC Rules as of October 25, 2013
Angel Capital Association (ACA) guidance on these matters: www.angelcapitalassociation.org
506(b) or 506(c) offerings
Quiet vs. Loud
- NTAN welcomes applicants making either type of offering.
- All applicants are expected to understand SEC regulations.
- We have a clear preference for Quiet offerings.
- NTAN meetings will not cause an issuer to be considered Loud.
- NTAN term-sheets will require the issuer to provide a legal opinion letter that it has complied with all applicable SEC regulations.
- NTAN term-sheets for Quiet offerings may specify no Loud activities for 6 months.
Certification of Investors
- We require that issuers use the SEC prescribed “principles‐based methodology” (PBM) to verify our members are accredited investors.
- Our members will not provide personal financial data to companies seeking investment.
- Loud issuers must take “reasonable steps to verify” that all purchasers are accredited.
- Absolute proof is not the standard.
- Issuers must document steps taken to verify.
- NTAN will provide written confirmation that an investing member is in good standing.
- The SEC provided four non‐mandatory, non‐exclusive verification methods.
- Place costly and dangerous burdens on both entrepreneurs and investors.
- on both entrepreneurs and investors.
- Raise untenable privacy concerns.
- NTAN members generally will not provide financial data per these methods.
- Both 506(b) AND 506(c) Issuers are subject to these very broad limitations.
Every issuer and investor should consult legal counsel regarding these matters.