The Securities and Exchange Commission just proposed new rules to protect investors in private investment funds. The proposed rules would require private fund advisers to disclose certain information and avoid certain practices. But these retail-like protections for private fund investors
New York Venture Hub
Legal & Business Issues Facing Entrepreneurs and Investors
New York Venture Hub, published by Farrell Fritz, P.C., focuses on legal issues relevant to venture capital, startups, and emerging businesses in New York. The blog covers topics such as corporate governance, equity incentives, restrictive covenants, securities regulations including Rule 506(c) offerings, and Delaware corporate law developments affecting venture-backed companies. It also addresses practical concerns for entrepreneurs and investors, including contract enforceability, stockholder rights, and compliance with state and federal laws. The content includes analysis of recent court decisions, legislative changes, and regulatory guidance impacting venture capital transactions and corporate operations in the New York market.
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Venture Capital Set Records in 2021, Faces Headwinds in ’22
2021 was a spectacular year for the American venture capital ecosystem, with VC investments, fundraising and exits all setting new highs. That according to the latest PitchBook-NVCA Venture Monitor, the self-described definitive review of the U.S. venture capital ecosystem. …
Course Correction: Why “Ordinary Course” Covenants in Acquisition Agreements Should be Drafted Carefully
Should a buyer be allowed to walk away from an acquisition if an extraordinary event occurs between signing and closing that forces the target company to take emergency remedial measures outside its ordinary course, even if consistent with industry practice…
Comments from the SEC(nut) Gallery: SEC Comment Letters Focus on SPAC Conflicts of Interest
Ever since the SPAC market exploded in late 2020 and early 2021, the SEC has sounded alarm bells through investor alerts, staff statements and public comments. In March of 2021, it warned investors not to invest in SPACs just because of…
Crypto Reform Goes to Congress: Proposed Three-Year Safe Harbor for Distribution of Pre-“Network Maturity” Digital Tokens
Background: Crypto Catch 22
Followers of the SEC’s efforts to regulate digital tokens will recall former SEC Corp Fin Director William Hinman’s speech at the June 14, 2018 Yahoo Finance Conference in which he introduced the now generally accepted proposition…
Series LLCs, Serious Risks
Lately I’ve been approached by clients and potential clients about series LLCs, so I thought it would be worth blogging about. Basically, a series LLC is an LLC that may create one or more series, each generally having separate assets…
“Do Your Homework!”: SEC Order Sends Strong Message to SPAC Participants on Due Diligence
The Securities and Exchange Commission announced on July 13, 2021 that it settled fraud charges against a special purpose acquisition company, its sponsor, its sponsor’s CEO and its proposed merger target for making misleading statements about the target’s technology and…
First Ever SEC Registered Digital Token IPO May Bring Clarity to Blockchain Asset Industry
On May 3, 2021, blockchain-based trading platform operator INX Ltd. announced it had completed its initial public offering of digital tokens, raising approximately $85 million in the IPO from over 7,200 institutional and retail investors. The INX IPO is the…
Securities Safety Check for New TV Series “Unicorn Hunters”
A new reality streaming television series called Unicorn Hunters debuts May 10 in which startups will pitch to a panel that includes Apple co-founder Steve Wozniak, and the panelists after grilling the entrepreneurs will make decisions on whether or not…
Issuers May “Test-the-Waters” Before Choosing a Securities Exemption
Perhaps the most vexing threshold issue faced by any company considering a capital raise is which securities exemption to pursue. The chosen exemption largely depends on the targeted amount of the raise, as well as the manner in which potential…