As more companies come into fruition, there has been an increase in the amount of IPOs requested across every industry. In 2014, an astounding 275 IPOs were completed, beating the previous 2013 total of 222 by more than 23%. Total U.S. IPO proceeds also exceeded the 2013 high-water mark of $55 billion, with $85 billion…
Why Reverse Mergers? Most people think “IPO” when they hear that a company is going public.[1] A cheaper and faster alternative to the traditional IPO, however, is through a reverse merger. In a reverse merger, “the shareholders of the private company exchange their shares for a large majority of the shares of the public shell…
Dropbox and Box are two rival cloud-storage companies that are raising large amounts of capital lately, but they are doing it in different ways under the securities laws. Â Dropbox.com is raising private capital through a private placement of securities while Box.com is raising public capital through an initial public offering. Â Success and failure in an…
DWAC stands for Deposit/Withdrawal at Custodian. It is an electronic transaction system run by The Depository Trust Company (DTC) that makes it possible to transfer new shares or paper share certificates between broker/dealers or custodial banks, the DTC participants, and the issuer’s transfer agent. The DTC is, thus, “a clearinghouse settling trades in corporate and…
The “bad boy” provisions have been added as a new paragraph (d) to Rule 506. These provisions disqualify an offering from utilizing the Rule 506 exemption from registration if certain persons related to the issuer or the offering have engaged in specified “bad acts.” Â The disqualification provisions apply to offerings under Rule 506(b) and Rule…
In 2012 Congress passed the JOBS Act, which mandated the creation of a new offering exemption under the Regulation D 506 program that would allow for general advertising of an offering to accredited investors.  The rules went into effect on September 23, 2013. Prior to the passage of the JOBS Act (and the subsequent promulgation…
When you acquire restricted securities or hold control securities, you must find an exemption from the SEC’s registration requirements to sell them in a public marketplace. Â Rule 144Â allows public resale of (1) unregistered securities, which are securities directly from an issuer, referred to as “restricted” securities; and (2) unrestricted securities held by an affiliate of…
DealBook reports that Coinbase, a startup that aims to help bitcoin and other virtual currencies gain acceptance, raised $25 million in financing. DealBook reports that “A steady stream of Silicon Valley investors has been building stakes in virtual currency start-ups. Last month, a Chinese Bitcoin exchange raised $5 million from Lightspeed Venture Partners. Google’s venture capital…
