Securities Attorney Harvey Kesner spoke at DealFlow Microcap Conference, along with panelists Mohit Bhansali, co-founder of EquiDeFi Ltd. (https://equidefi.com/) and Mark Elenowitz, Managing Director of Digital Offering, LLC. (https://www.digitaloffering.com/).
The key points discussed include:
- The challenges faced by small and micro-cap companies in raising capital, with traditional methods being costly, time-consuming and often leading to toxic financings.
- The modernization of capital formation processes enabled by regulatory changes like the JOBS Act, allowing companies to reach a wider pool of accredited investors through general solicitation (Rule 506c).
- The use of technology platforms like EquiDeFi® to digitize and streamline processes like investor accreditation, KYC/AML checks, electronic signatures and audit trails for compliance.
- The importance of proper verification of accredited investor status beyond self-certification, using methods like tax returns, W2s or certified broker/attorney letters.
- The role of broker-dealers in ensuring regulatory compliance and conducting additional due diligence on investors beyond just platform checks.
- The growing significance of the private placement market ($4.5 trillion in 2022) as an alternative capital source with the dearth of IPOs and venture funding.
Watch the full presentation below.