The SEC issued new rules on general solicitation as part of the JOBS Act, allowing private offerings to advertise to potential investors as long as they only sell to accredited investors. Companies must now verify accreditation rather than accept self-certification, and are subject to "bad actor" provisions and additional reporting requirements. OurCrowd operates as both a venture capital and crowdfunding platform, focusing on Israeli startups while complying with US and Israeli regulations.

1. NEW RULES ON
GENERAL
SOLICITATION
SEC issues new rules on allowing general
solicitations on certain private offerings as part
of JOBS Act
Charting a course in a new world
Monday, September 16, 13

2. Legal Disclaimer
This presentation is for general informational and
educational purposes only and does not constitute or
purport to render legal advice or legal opinions. The material
is intended, but not promised or guaranteed to be current,
complete, or up-to-date and should in no way be taken as
an indication of future law and practice. Transmission of the
information is not intended to create, and the receipt does
not constitute, an attorney-client relationship between us.
The opinions expressed in this presentation are personal
views only and do not reflect the opinions of any
governmental organization. You should not act or rely on
any information contained in this presentation, both oral and
written, without first seeking the advice of an attorney.
Monday, September 16, 13

3. Who am I?
• Zack Miller, Head of Investor
Community, OurCrowd
• 10 years focused on intersection of
social media, technology, and
investing (Seeking Alpha, Covestor,
Lending Club)
• Author, Tradestream your Way to
Profits: Building a Killer Portfolio in
the Age of Social Media (Wiley,
2010)
Monday, September 16, 13

4. Little bit about OurCrowd first
• Emerged as leader in venture capital-type crowdfunding
space ($20M in 31+ rounds, 27 companies)
• 7 deals over $1M (#2 worldwide after Kickstarter)
• 5 follow-on rounds (2x valuation upticks in months)
4
Monday, September 16, 13

5. Combining the best of 2 worlds
5
Exposure to top dealflow
Professional due diligence
Legal issues/termsheets
Preemptive/other rights
Independence, DIY
Low fees
No large upfront commitment
Relative speed and ease
Venture Capital Angel Investing
Monday, September 16, 13

6. Portfolio company example: Argo/Rewalk
6
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7. Global in nature
7
Investors from
19 countries
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8. 5 Follow-on rounds
8
$5M pre … 11/12 $10M pre … 3/13
2X valuation in 4
months
$325K of $725
round
$350K of $800K
round
2X valuation in 4
months
$2M pre … 1/13 $4M pre … 9/13
2X valuation in 8
months, Added
Lool Ventures
$550K
$215K of $1.3M
round
2X valuation in 8
months, Added
Lool Ventures
$3.25M pre …
11/12
$6.65M pre …
9/13
2X in 10
months, added 2
major VCs
$550K of $1.3M
round
$110K of $4.5M
round
2X in 10
months, added 2
major VCs
3 examples
Monday, September 16, 13

9. Who am I?
• Jay Kalish, General Counsel for
OurCrowd
• 20 years experience as in-house
counsel/IR for publicly traded
companies
Monday, September 16, 13

10. History in a nutshell
• Why: SEC role in protecting investors
• How: No general solicitation or general advertising of
unregistered securities allowed
• But: Current exemption – certain private offerings only to
accredited investors
• Self-accreditation was sufficient
• US accreditation standards
Monday, September 16, 13

11. JOBS Act - 2012
• Congress’ attempt to stimulate
jobs in the US economy by
broadening investment in private
companies
• Mandate for Securities &
Exchange Commission (SEC) to
issue operative regulations
• First set of rules issued by the
SEC in July 2013, effective
September 23, 2013
Monday, September 16, 13

12. SEC Issues Rules
• New Rule 506(c) provides:
• General solicitation and general
advertising allowed
• Only accredited investors can actually
purchase
• Self-accreditation no longer enough –
need to implement verification
procedure
• Bad actor provision
• New reporting requirements –
currently in proposal stage
• Relates to US residents only
Monday, September 16, 13

13. Advertising & Solicitation
General advertising and solicitation allowed in the US only
• All US residents now able to see and attend meetings with
actively funding companies (whether accredited or not)
• Web site to contain limited info on funding companies for
US users only
• Proposed regulations – pre-filing of Form Reg D;
marketing materials (510T); mandatory legends (509)
Monday, September 16, 13

14. Accreditation
• Definition of accredited investor remains the same
• Self-accreditation no longer sufficient
• New rule requires each US investor to provide certification
letter
• Issued by registered broker-dealer; investment advisor registered
with SEC; licensed attorney; CPA
• Certification letter needs to be renewed periodically
• Confirm that certification letter is still accurate at the time of each
actual investment
Monday, September 16, 13

15. Bad Actor Provision
• Issuers can only use
Rule 506 offerings if
no “bad actors”
associated with them
• SEC issued clear
guidelines
• Gets bad guys off
the street – more
protection for
investors
Monday, September 16, 13

16. New Reporting Requirements
• Reg D filings must be completed at least 15 days prior to
offering
• Proposed regulations – additional filing post-offering
Monday, September 16, 13

17. In Summary…
• New rules open opportunities for OurCrowd investors
• Expanding the audience – “crowd building”
• Evolving area of law
• OurCrowd leveraging the changes while taking a
conservative approach
Monday, September 16, 13

18. OurCrowd
• Hybrid VC-crowdfunding platform for accredited investors
only
• Operating under SEC’s VC exemption; full compliance with
US and Israeli law
• Funded 26 companies to date
• Raised over $20M for portfolio companies
• Current focus on the best of Israel’s Start-Up Nation;
expanding to international
• Investors from 19 countries to date
Any questions?
email Jay (jay@ourcrowd.com) or Zack (zack@ourcrowd.com)
Monday, September 16, 13