Raising money through the JOBS Act: Rule 506(c)

1. Raising Money Through the
JOBS Act: Rule 506(c)
© Pino Nicholson PLLC • All Rights Reserved www.pinonicholsonlaw.com

2. 1. The JOBS Act - Overview
2. The Law
3. The Opportunity
4. The Advantages of Rule 506 (c)
5. The Structure
6. The Benefits
Agenda
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved

3. On April 5, 2012, President Obama signed into law the Jumpstart Our
Business Startups Act, known as the JOBS Act. The express purpose
of the JOBS Act is to “increase American job creation and economic
growth by improving access to the public capital markets for emerging
growth companies.”
On July 24, 2013, the SEC adopted final rules to implement the
relaxation of the prohibition against general solicitation for certain 506
offerings by adding 506(c). The rules were effective on October 23,
2013.
On March 25, 2015, the SEC adopted final rules to implement the
amendments to Regulation A. The new Regulation A is commonly
known as Regulation A+ and became effective on June 19, 2015.
© PinoNicholson, PLLC All Rights Reserved
The JOBS Act
Overview

4. Regulation “D” – Rule 506(c)
 Unlimited Amount of Capital in a 12 month Period
 Public solicitation permitted but limited to accredited investors
 “Accredited” investors only
 Disclosure Documents with financial statements required
 Must take reasonable steps to verify that each purchaser is an
“accredited” investor
 Exempt from state Blue Sky, although some states require a
notice of filing
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved
The Law
Regulation D

5. “Accredited investor” defined (as to a natural person)
 Has a net worth of least $1 million, either alone or together with
a spouse, (excluding the value of the person’s primary
residence); or
 earned income that exceeded $200,000 (or $300,000 together
with a spouse) in each of the prior two years, and reasonably
expects the same for the current year
Investor Thresholds for all Exempt Offerings
 Total assets greater than $10,000,000 AND
 2,000 total investors or 500 non-accredited investors
Once the thresholds are met, the company must transition to a public
reporting company within two years; i.e., must register with the SEC.
The Law
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved

6. Advantages of Rule 506(c) Funds
 Unlimited Capital
 Public Solicitation for Accredited Investors
 No Need for Prior Relationship
 Dedicated Website
 Inclusion on Other Websites
 Event Presentations and Open Marketing
Solicitations
 Routinize the Capital-Raising Function
The Opportunity
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved

7. • Structure
 LLC Filing for Fund
 LLC Operating Agreement for Fund
 LLC Filing for Fund Manager
 LLC Operating Agreement for Fund Manager
• Business
 Website
 Tech Platform
 Home Office
 Stationary
 Cards
Structure
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved

8. • Securities Documentation for Rule 506(c) Fund
 Private Placement Memorandum (PPM)
 Subscription Agreement
 Investor Qualification Profile
 Accredited Investor Representation Letter
 Certificates of Ownership
 Transmittal Letters
 Memorandum of Instruction
• Securities Management
 Compliance For Investors
 Investor Letters
 Investor Account Setup
 Accounting
 Quarterly Distribution and Liquidation
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved
Structure
Regulation D

9. 1. Focused Opportunities: Distressed Assets, Real Estate, Mortgages,
Assisted Living Facilities, Technology Companies, Businesses, Private
Equity, etc.
2. Flexibility of Investments
a. Direct
b. Arbitrage
c. Management
3. Management Fees
4. Investment or Business Income
5. Tax Benefits
The Opportunity -
Business or Investment
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved

10. For information or to schedule a personal consultation,
call (407) 206-6516 and speak with Cathy Simmons.
The Opportunity -
Business or Investment
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved

11. Raising Money Through the
JOBS Act: Rule 506(c)
www.pinonicholsonlaw.com© Pino Nicholson PLLC • All Rights Reserved