Published by the International Financial Law Review, A Deep Dive into Capital Raising Alternatives provides an overview of the Jumpstart Our Business Startups (JOBS) Act, including the IPO on-ramp provisions, Regulation A, Regulation Crowdfunding, the changes to the Securities Exchange Act of 1934 threshold for US Securities and Exchange Commission (SEC) reporting, and the changes eliminating the prohibition against general solicitation in connection with certain exempt offerings.
The book provides context on the changes in market structure and market dynamics that led to the enactment of the JOBS Act. Specifically, the trend for many private companies to remain private longer, defer or dispense with traditional IPOs in the United States, and rely on private capital to fund their growth. We discuss reliance on the JOBS Act to undertake an IPO, including the IPO process and practices adopted by emerging growth companies.
The book contains important updates, including the changes that the SEC has adopted since the JOBS Act essentially extending many of the most popular elements of the JOBS Act—confidential submissions and test-the-waters communications—to all issuers, as well as changes brought about by the Fixing America’s Surface Transportation (FAST) Act and as a result of the SEC Division of Corporation Finance’s disclosure effectiveness amendment. We also provide updates on the recent changes to the definition of accredited investor and qualified institutional buyer and the proposed changes to the SEC’s legal framework for exempt offerings. Finally, the book offers some insights into alternative approaches to becoming a public company, including direct listings and merging into special purpose acquisition companies (SPACs).