Why Aren’t Reg A Offerings More Popular Among Small Businesses?

By David Krause April 27, 2023 by renholding

Regulation A (Reg A) offerings were revamped under the Jumpstart Our Business Startups Act (JOBS Act) in 2012 to increase the maximum offering size of exempt securities from $5 million to $50 million.[1] However, despite this potential source of …

Too Much Information? Increasing Firms’ Information Advantages in the IPO Process

By Michele Dathan and Yan Xiong May 3, 2022 by renholding

Traditionally, high-growth private firms in the United States have used the public equity markets as their primary source of external financing to fund innovation and expansion. For this reason, well-functioning capital markets have been instrumental to the U.S. economy, supporting …

Legal Guardrails for a Unicorn Crackdown

By Alexander I. Platt February 17, 2022 by renholding

The SEC is undertaking an historic effort to redraw the boundary between public and private companies. After years of watching – and sometimes encouraging – the explosive growth in less tightly regulated private markets and the proliferation of so-called “unicorns,” …

The Jobs Act Did Not Raise IPO Underpricing

By Omri Even-Tov, Panos N. Patatoukas and Young S. Yoon September 17, 2021 by renholding

The JOBS Act was signed into law on April 5, 2012, with the objective of improving access to the public capital market for growth companies. Title I of the JOBS Act amended the Securities Act and the Exchange Act and …

Deregulating Innovation Capital: The Effects of the JOBS Act on Biotech Startups

By Craig M. Lewis and Joshua T. White September 17, 2020 by renholding

Since the start of the COVID-19 pandemic, everyone from politicians to reporters to ordinary Americans have been talking about drug treatments, vaccines, and the Federal Drug Administration (FDA) approval process. These discussions have centered on vaccine developments by well-known pharmaceutical …

Does Advertising Improve Access to Capital for Small Businesses?

By Anup Agrawal and Yuree Lim August 28, 2020 by renholding

Private markets have contributed significantly to capital formation in the U.S. economy, particularly for small companies that are often considered the engine for creating new jobs and for accelerating economic growth (see, e.g., Zhao, Harris, and Lam, 2019). The amount …

The Impact of the JOBS Act on M&A

By Jitendra Aswani, Sudip Gupta, Iftekhar Hasan and Anthony Saunders August 18, 2020 by renholding

The Jumpstart Our Business Startups (JOBS) Act, enacted in April 2012, was designed to make it cheaper for emerging growth companies (EGCs) to access capital and, by weakening disclosure requirements, easier for them to conduct initial public offerings (IPOs). Its …

Does Reducing Disclosure Mean Fewer Pre-IPO Lawsuits?

By Burcu Esmer, N. Bugra Ozel and Suhas A. Sridharan June 12, 2020 by renholding

Can silence solve problems that words cannot? The Securities and Exchange Commission (SEC) hopes so, because this premise underlies the confidential filing provision of the Jumpstart Our Businesses (JOBS) Act. But how firms benefit from confidential filings remains unclear, complicating …

Which Companies Crowdfund?

By Andrew Abraham Schwartz May 29, 2020 by renholding

The JOBS Act and Regulation Crowdfunding were intended to create a new and inclusive type of online capital market where all entrepreneurs, regardless of their physical location, gender, or anything else, can go directly to the public (the “crowd”) to …

Top Executives’ Compensation and Firm Survival

By Dimitrios Gounopoulos, Georgios Loukopoulos and Panagiotis Loukopoulos March 7, 2019 by renholding

Executive compensation elicits strong opinions from shareholders, practitioners, and the public alike. Ideally, compensation packages should be designed to attract, retain, and motivate executives to perform in accordance with the objectives of their companies’ shareholders. This idea is consistent with …

SEC Chair Clayton Talks Capital Formation

By Jay Clayton August 30, 2018 by renholding

I am delighted to participate in the 36|86 Entrepreneurship Festival here in Nashville, Tennessee. I would like to speak for about 25 minutes about key capital formation initiatives at the SEC.[1] After my remarks, I will be joined by

…

Thinking Holistically Before Dropping Quarterly Reporting

By James D. Cox August 27, 2018 by renholding

Robust capital markets are widely believed to signal economic vitality, and a reliable barometer of such vitality was historically a rising number of IPOs and listings. Yet, as we are experiencing record setting economic expansion, that barometer has failed us. …

The Irrepressible Myth That SEC Overregulation Has Chilled IPOs

By John C. Coffee, Jr. May 29, 2018 by renholding

The following is an abbreviated version of Professor Coffee’s May 23 testimony before the House Financial Services Committee’s Subcommittee on Capital Markets, Securities, and Investments. The deleted portions of his testimony relate to the specific content of proposed bills to …

Gibson Dunn Discusses SIFMA Report on Helping More Companies Go and Stay Public

By Glenn Pollner, Hillary Holmes, Jessica Annis and Nicolas Dumont May 16, 2018 by renholding

On April 27, 2018, the Securities Industry and Financial Markets Association (“SIFMA”), the leading industry group representing broker-dealers, banks and asset managers, along with other securities industry related groups, released a report called “Expanding the On-Ramp: Recommendations to Help More …

Optimal Disclosure and Litigation Rules around IPOs and SEOs

By Onur Bayar, Thomas Chemmanur and Paolo Fulghieri February 6, 2018 by renholding

In recent years, there have been a number of reforms to the legal and regulatory framework governing disclosures and litigation around initial public offerings (IPOs) and seasoned equity offerings (SEOs). The most prominent of these are the JOBS Act of …

The Twilight Zone: OTC Regulatory Regimes and Market Quality

By Ulf Brüggemann, Aditya Kaul, Christian Leuz and Ingrid Werner August 8, 2017 by renholding

More than 8,000 domestic equity securities were publicly traded in the U.S. over-the-counter (OTC) market in 2010. Yet, research studying this market is limited. On the one hand, the OTC market attracts stocks of firms that tend to be small …

The Case for Federal Preemption of State Blue Sky Laws

By Rutheford B. Campbell, Jr. May 18, 2017 by renholding

Society imposes legal requirements on businesses (issuers) when they offer or sell their securities to investors. These rules governing capital formation are generated both at the federal and state levels. State securities rules are generally referred to as “state blue …

The Role of State Blue Sky Laws After the JOBS Act and the National Securities Markets Improvement Act

By Rutheford B. Campbell, Jr. February 15, 2017 by renholding

State securities laws—generally referred to as “blue sky laws”— contain both registration provisions and antifraud provisions. Registration provisions require that a company offering its securities to investors in a particular state register its securities with the state or meet the …

Drinker Biddle Reports on Crowdfunding and FINRA’s First Enforcement Action

By Marc A. Leaf, Robert T. Esposito and Amanda P. Garger February 10, 2017 by renholding

In the fall of 2016, UFP, LLC, d/b/a uFundingPortal (UFP), became the subject of FINRA’s first enforcement action against a registered funding portal. During the course of the investigation, UFP shut down its website and withdrew its registration as a …

Share Profits to Harness the Wisdom of Crowds

By Jiasun Li October 14, 2016 by renholding

Crowdfunding has emerged in recent years as an alternative financing channel in which entrepreneurs can directly solicit contributions from a large number of investors. In return for their contributions, investors receive non-pecuniary rewards, private benefits, or most recently, monetary payoffs. …

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The CLS Blue Sky Blog

Columbia Law School's Blog on Corporations and the Capital Markets

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