Thoughts on startups by investors that
fund them & entrepreneurs that run them

Blog Archives

Incorporate before pitching to VC’s?

While you will definitely need to be a corporate entity before you can accept funding from any investor (or issue stock options to any employees), the specific corporate status of the venture at this stage is much less important to investors than its functional status. That is, if all you have is a good idea, the reality is that you

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Is it legal to solicit investors for a startup since the JOBS Act has passed?

Yes and No.

The JOBS Act has several pieces, two of which are relevant here. The fascinating thing is that they allow for diametrically opposite activities! The key questions are:

Who can you MARKET to? Who can you SELL to?

Under the Crowdfunding provisions of the JOBS Act, a startup company will, for the first time, be able to sell

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Will the most successful crowdfunding portals be restricted to accredited investors?

This is an interesting question, and one to which no one really has an answer yet. To some extent it will depend on what the SEC decides to do with the regulations surrounding the whole subject, which they have until the end of the year to write.

My personal guess is that the early stage funding world will likely trifurcate

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