Welcome to Commonwealth Capital the Architects of Finance™.
SEC: Rule 402(b)(5) under Title II of the JOBS Act of 2012.
The rule permits a funding portal to advise an issuer about the structure or content of the issuer’s offering, including preparing offering documentation. We believe funding portals will be in a position to provide experience and assistance to issuers relatively efficiently, and should be able to leverage their expertise to increase the viability of crowdfunding. We [SEC] believe that funding portals, as well as broker-dealers, should be permitted to provide certain services to issuers to facilitate the offer and sale of securities in reliance on Section 4(a)(6). Without these services, crowdfunding as a method to raise capital might not be viable. Rule 404(b)(5) permits funding portals to advise an issuer about the structure and content of the issuer’s offering in a number of ways. A funding portal can, for example, provide pre-drafted templates or forms for an issuer to use in its offering that will help it comply with its proposed disclosure obligations. Other examples of permissible assistance can include advice about the types of securities the issuer can offer, the terms of those securities and the procedures and regulations associated with crowdfunding.
Crowd-Funding Portals can now provide the New Business and Sprocket Networks™ to educate their customers; provide pre-drafted securities-offering-document templates to their customers to ensure their success and compliance but more protect their business model in ways here-to-fore unavailable while increasing the revenue stream.
Consider the Entrepreneur that comes to your crowd-funding portal wanting to know how to effectively raise capital. The Entrepreneur understands the premise behind the donation crowd-funding model but is unfamiliar with the more effective capital raising model of offering securities to investors to raise capital. More importantly, most Entrepreneurs are not familiar with the potential legal pitfalls of conducting a securities-offering using template securities-offering documents that have not been reviewed by competent securities counsel. What educational resources do you have to correctly and comprehensive inform the Entrepreneur? Commonwealth Capital can help you.
Your Crowdfunding portal, as an Enterprise Associate of the New Business and Sprocket Networks™ can now provide the customer a thorough education through the New Business and Sprocket Networks™ and enable the Entrepreneur to make qualified decisions on how to proceed with a complaint and effective securities offering. Those Entrepreneurs who move forward by producing and presenting legally compliant and lawyer reviewed securities-offering documents to the crowd of investors in your portal, will reduce your business’ legal compliance burden.
As federal and state securities regulators crack down on abuses within the investment crowd-funding model, the last thing you need is being caught up in a State Bar Association complaint that your business’ illegally gave legal advice by preparing legal documents for your clients or possibly worse a regulatory or investor complaint that your business aided and abetted a fraudulent investment solicitation.
Even if your firm is a SEC registered broker dealer and FINRA member, if your clients solicit investors using securities-offering documents that have not been properly reviewed by legal counsel, your business may not be able to deflect allegations of your unlicensed practice of law or your participation in a fraudulent securities offering.
This is our invitation for you to join us in assisting entrepreneurs in achieving their dreams, and to build your crowd-funding portal in ways that truly set you apart from your competition, while deflecting potential liabilities.
“We Compete with No-one, as we Incubate for Every-one!”