Angel Capital Association Offers Reduced Memberships for Accredited Investors Who Attend Washington DC Event

No cost equity crowdfunding platforms and the introduction of general solicitation for the first time in 80 years presents challenge to high membership fees and the old way of doing business

By Robert Hoskins

Want a discount on the ACA’s membership fees? Angel investors who join  an accredited equity trading platform such as AngelList, FundersClub, SeedInvest, or DreamFunded, which are ACA members, a will receive an 85% discount off annual memberships. Individual investors are also being offered the ACA membership reductions.

Sessions include angel investing best practices, the latest trends in data in early-stage investing, new SEC regulations involving general solicitation, crowdfunding and the definition of an accredited investor, the future of angel investing, investing in different industry sectors, using crowdfunding platforms for successful syndication, and many others.

What’s at risk?  U.S. angel investors, individuals who support startup companies with passion, experience and funding – in 2012 invested nearly $23 billion in about 67,000 ventures, according to estimates by the Center for Venture Research at the University of New Hampshire.

“The ACA is the place to be for both experienced and (especially) new angels who want to share great ideas, to learn unique investment practices from each other, and don’t want to be left unaware of how the seed stage investment landscape is changing – particularly from a regulatory perspective,” said David Verrill, ACA’s chairman.  “We are hosting this meeting in Washington, D.C. for a reason – the Securities and Exchange Commission is not only assessing the underlying definition of who can be an accredited investor, but is also reviewing significant rules around the JOBS Act involving general solicitation and online crowdfunding platforms. Now more than ever is the time to join with angel colleagues to learn about, to shape, and to nurture this powerful economic engine.”

More than 700 angel investors, including those among the most active, sophisticated and successful in the world, will share expert advice and ideas.

Sessions include angel investing best practices, the latest trends in data in early-stage investing, new SEC regulations involving general solicitation, crowdfunding and the definition of an accredited investor, the future of angel investing, investing in different industry sectors, using crowdfunding platforms for successful syndication, and many others.

The Innovation Showcase, a related event at the Summit, will show angels in action when dozens of promising startups will receive invaluable advice and feedback from angels.

Discussions will include:

• New and proposed federal rule changes, including a potential change to the definition of who can invest in equity investment deals, will dramatically increase capital available to startups and introduce another 229 million hobby investors that will be able to invest up to $2,000 per year alongside the accredited investor population.
• Congressional leaders, including Sen. Chris Murphy (D-Connecticut), will discuss how they support angel investing and its vital role in innovation and the American economy.
• Insight into tactics angels deploy to identify the best investment opportunities in top industries including life sciences and medical devices, information technology and internet, cleantech and cyber security.
• 2013 angel group deal trends, collected from more than 200 angel groups, will be shared by Rob Wiltbank, VP of research at the Angel Resource Institute (ARI), with the live release of the 2013 Halo Report, by ARI and Silicon Valley Bank, with data powered by CB Insights.
• Compelling stories, including from Blackboard co-founder Michael Chasen, who will recount how he took his learning management system company from angel backing to IPO.
• New accredited online platforms are disrupting the angel investing market. Leading platform companies including premier sponsor FundersClub will lead the discussion.
• Which are the most angel-friendly countries in the world — and how is angel investing helping spur their economies?

Registration is open to ACA members and accredited individual investors from around the world, as well as accelerator and incubator leaders, university innovation professionals, economic development leaders, and public policy makers.

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SEC Lifts Ban on General Solicitation; Implements First Phase of JOBS Act for Reg. D, Title II Accredited Investors

SEC Lifts 80-Year Ban on the General Solicitation of Private Placement Equity Investments

By Robert Hoskins

Today, the United States finally inched its way toward the full implementation of the JOBS Act passed in April 2012, required by federal law to be in place by January 2013, but still not fully realized as intended by President Obama and the both houses of the U.S. Congress.

SEC Crowdfunding Call for Comments on November 15, 2013

“We want this new market and the private markets in general to thrive in a safe and efficient manner, and these rules we adopted and proposed are designed to facilitate that objective,” said Mary Jo White, Chairwoman of the SEC. “As we fulfill our mission to facilitate capital formation and maintain fair and efficient markets, the Commission must always focus on strong investor protections.”

Until the general solicitation ban was lifted, hedge funds, VCs, and startups had to quietly raise that money, soliciting by word of mouth and other forms of private communication. Now companies can buy ads, launch PR campaigns, leverage social media and openly announce that they’re seeking investors.

The addition of general solicitation is expected to fuel a new cottage industry of investor matching-making websites that aim to broaden the investment pool to financial stalwarts outside the stanchly protected investment circles of Silicon Valley.

“With general solicitation it will be much easier for investors to find companies they are passionate about supporting,” said Mike Norman of crowdfunding website, WeFunder. The new rule will hopefully open up the capital-starved startup market to the majority of investors. According to WeFunder’s website, only 3% of the US’s 8 million accredited investors are active in the tech startup space.

For example, leading startup investing platform, RockThePost, announced last week that its equity crowdfunding website will provide the following equity crowdfunding investment services:

1. Prominent featuring of startups publicly announcing investment rounds
2. Investor verification system that shifts the burden off startups
3. Secure transactions where Escrow accounts act as a safe haven for early committed investors
4. Full transparency – third party identity checks and legal business verification, crowdsourced due diligence, bank-level security
5. Smart matching of investors to startup investments that match their preferences

Equity crowdfunding sites such as Angelist, Circleup, Crowdfunder, FundersClub, RockThePost and Wefunder are important the nascent industry because according to the Center for Venture Research, only 258,000 investors have made an angel investment out of the 8.7 million accredited investor households eligible to invest in the U.S.

The general solicitation ban lift will allow startups to publicly fundraise via methods such as equity crowdfunding, harnessing the power of the internet and social media to reach potential investors in all corners of the country.

According to a Forbes article, many states have decided not to wait on the SEC. Kansas, the first state to enact laws requiring the registration of sales of securities to the general public 100 years ago, turned out to be the first in the U.S. to enact an “intrastate” Invest Kansas Exemption law. The state of Georgia passed the Invest Georgia Exemption that provides even more freedom for crowdfunding than the Kansas exemption. North Carolina’s House passed a crowdfunding bill that is expected to move to the full legislature in an updated form and be signed into law next year. The state of Washington is currently teeing up crowdfunding legislation and other states will likely follow suit.

Tanya Prive, a co-founder of RockthePost, points out that “One of the other issues I’ve seen is that there are plenty of startups with a large customer base that they cannot tap into for capital support under existing regulations. These people are the biggest fans and evangelists of the brand, who might be first in line to invest. Once the user base is able to engage with their beloved company in fundraising mode via an investment crowdfunding platform, the company will be able to capitalize on the crowd’s interest in their success and accelerate the fundraising process by converting customers into investors.”

“So although there are strings attached to the ruling, lifting the ban on general solicitation – an 80-year-old rule – will help investors connect with entrepreneurs, and vice versa. The decision also weighs in the favor of entrepreneurs and investors who live outside places like Silicon Valley, where old-school networking and personal connections are how financing deals typically happen,” said Eric Markowitz, crowdfunding reporter for Inc. Magazine. “By lifting the ban, entrepreneurs living outside traditional tech hubs may find it easier to connect with investors, raise money, and grow their start-ups without having to necessarily relocate.”

Although large players like private equity firms Bain Capital and Blackstone Group LP could take advantage of the chance to use television ad campaigns, many lawyers and regulators close to the industry have said that they expect smaller funds with fewer resources to test the new rule first.

“By allowing issuers to solicit to a broader group of potential investors, the SEC has showed its commitment to democratizing the investing process and putting an end to yesterday’s ‘old boy’ investor networks,” said Barry Silbert, founder and chief executive of SecondMarket Inc., a marketplace for private shares.

The next important date to watch for is October 31, 2013, when the 2nd wave of SEC crowdfunding guidelines are expected to be issued for Title III investors that will allow unaccredited investors to participate in private placement investments.

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More News on the SEC’s New General Solicitation Rules:

1. SEC Lifts Ban On General Solicitation, Allowing Startups

2. SEC Approves JOBS Act Requirement to Lift General Solicitation Ban

3. Starting Today, Startups Can Broadcast Their Fundraising From the Rooftops

4. The General Solicitation Ban Lift Can Change Startup Investing Forever

5. Crowdfunding Will Flourish Regardless Of What The SEC Does

6. Game Changer: SEC Lifts General Solicitation Ban

7. Boon for Start-ups: SEC Lifts Ban on General Solicitation

8. SEC lifts longtime advertising ban for hedge funds, others

9. SEC Lifts Ban on General Solicitation in Certain Private Placements

10. S.E.C. Lifts Advertising Ban on Private Investments

11. SEC Votes to Ease 80-Year-Old Ban on Private-Investment Ads

12. SEC Lifts Ban on Hedge Fund Ads

13. SEC Lifts 80-year-Old Ban on Advertisements for Private Investors

14. SEC lifts advertising ban on private investments: How it affects you

15. SEC Votes to Lift Ban on Hedge Fund Advertising