On Friday, November 10th StartEngine hosted a summit focused on regulated ICOs.
Check out the Top 10 Highlights from the event:
- Management and company counsel might need to consult with local legal counsel in other countries to ensure compliance with rules and regulations of other countries. The level of compliance requirements might ultimately result in eliminating countries from the token offering. For those countries that do not get eliminated, be sure to include relevant disclosures by country (and state).
- There are several possible federal exemptions and securities regulations that can be used, such as 506(c), the Crowdfunding regulation, Regulation A+, and Regulation S. If you’re relying on more than one, be sure you’re complying with the requirements of each, as they may be different. Also, be careful to also comply with state securities exemption requirements, if necessary.
- In order to comply with the advertising rules for US and non-US investors, consider having the tokens sold in the US be different from tokens sold to foreign investors.
- Company should consider as a risk factor what the implications are if their token cannot handle the large number of users at the end of their token sale.
- “Curb your enthusiasm”, meaning what you say today in marketing and advertising can be used against you later.
- When determining whether an investor is accredited, go beyond just a questionnaire. Get bank statements or a letter from their accountant to verify income.
- The variety of possible exemptions and securities regulations all have different resale restrictions to be considered and complied with during token sales.
- Be extra diligent when doing your know your customer (KYC) and anti-money laundering (AML) checks.
- Some investors think there is too much emphasis on who the Company’s advisors are during an ICO. Instead, the focus should be on identifying for investors: (1) who is on the management team? (2) what is the opportunity? (3) what is the smart contract code itself and has it been audited? (4) what is the overall marketplace analysis? and (5) what is the company’s expectation for the use of proceeds?
- Investors should have engineers and coders on their team to look at the smart contract code during diligence.
If you missed the event or for more information visit: https://www.startengine.com/ico
Join us on October 19th for our Top Ten Legal Mistakes Made by First Time Entrepreneurs event at Innovate Pasadena’s Connect 17.
Date: Thursday October 19, 2017
Time: 6:00pm – 7:00pm
Location: CTRL Collective
The event is FREE to all attendees, but RSVPs are requested: https://connectpasadena.com/events/top-10-legal-mistakes-made-by-first-time-entrepreneurs.
I had a great time at the San Fernando Valley Business Journal’s reception last night for their new Valley 200 book.
I am honored to be included in this inaugural issue of Valley 200, which serves as a compilation of the most influential people in the Valley area.
Our fall First Time Entrepreneur workshop is scheduled for Saturday, September 16, 2017!
At this workshop you will learn how to:
- Determine the value of your company
- Put together a capitalization table
- Understand how Venture Capitalists screen potential investments
- Understand the differences between trademarks, copyrights and patents and when you need each of them
- Work with co-founders
- Network at startup events — the right way
For more information and to sign up, visit: First Time Entrepreneur Workshop.