The Wall Street Journal recently reported that the Securities and Exchange Commission (SEC) is considering rule changes that would make it easier for individuals to invest in private companies such as Uber and Airbnb. Generally, certain wealth or income standards must be met before an individual is able to invest in private companies. One way for the SEC to make it easier for individuals to invest in private companies is to modify these restrictions. Ultimately, relaxing the rules would 1) provide private companies additional sources of capital, and 2) give certain investors access to additional investment opportunities.
Before any changes are made, the SEC will be seeking public comment in the coming months. The SEC Chairman believes that once this is done, rule changes could happen “pretty quickly.”
BrownWinick will continue to monitor any rule changes that impact the capital raising process. If you have any questions, please contact any attorney in the BrownWinick Growth Capital practice group.