Bohemia, NY (PRWEB) September 30, 2013
Financing expert Alec Sohmer responds to an article published by the Wall Street Journal, which discusses the recent induction of certain regulations for startup fundraising set forth under the JOBS Act.
According to an article published by the Wall Street Journal on September 23rd titled “Startups, VCs Now Free to Advertise Their Fundraising Status,” companies are now able to participate in general solicitation. Now, under new rules in the JOBS Act override a previous ban on “advertising for private securities offerings.” This now means that startups and other new companies can advertise their fundraising efforts through a variety of mediums including e-mail, social media, videos, blogs and other marketing tools.
The article says one startup, TechShop, took the news well, announcing that it has solicited over $60 million from private investors to expand its business across the country. Previously, this would not have been possible. The company would have only been able to disclose fundraising information to accredited investors, the article says.
[Alec Sohmer, a financing specialist and managing director at Plymouth Rock Capital, says this could change the game for many venture capitalists and startup companies. “When a startup can disclose fundraising information, it could prompt the public to start investing,” he says. “Now that everything is in the open, people are able to see what a company is doing and if its worthy of attention. Crowdfunding is an excellent resource for many startups and it’s refreshing to see the government add that into regulations.”
However, the article says, “Startups can still operate under the old rules if they do not engage in general solicitation.” That being said, Sohmer advises traditional startup founders to make sure their investors are accredited before solidifying a deal or accepting funds.
Alec Sohmer, a strategic financing leader and co-founder of Plymouth Rock Capital, has 20 years of Board-level experience. He has served in many interim management positions for businesses requiring significant turnaround or restructuring. He is able to increase revenue streams by utilizing a variety of line management techniques. In his two decades of experience, he has dramatically increased revenues of businesses by identifying untapped markets.