Raising money for your business? Shout it from the rooftops. For the first time, it’s allowed.
The Securities and Exchange Commission today voted four to one that it will overturn the ban on publicly advertising that your company is raising money, what’s called “general solicitation.” By voting to lift the ban on general solicitation, the Commission has essentially made it legal for private companies to tell anyone that they are raising money, which was previously illegal.
“Startups and other private companies have been handcuffed from reaching a broader audience,” says Alex Mittal, chief executive and co-founder of Founder’s Club an online venture capital platform. “If you think of private company stock as a product of a company, what seller of a company isn’t allowed to talk about their own product, their own goods?”