After several years of heated debate following release of the U.S. Securities and Exchange Commission’s proposed crowdfunding rules, the SEC’s final rules permitting small private companies to raise capital through crowdfunding will become effective on May 16. Under the rules, “Regulation Crowdfunding,” in any 12-month period issuers will be allowed to raise up to an aggregate amount of $1 million through crowdfunding offerings.
Given the offering size limitation, issuers will likely be particularly focused on ensuring that legal fees for outside counsel in crowdfunding offerings do not get out of hand. For that reason alone, your company may look to you, as in-house counsel, to take the laboring oar on process management and legal documentation for the offering. Therefore, it is important for you to have a solid understanding of the new rules.
