A few things to think about if you decide to engage in General Solicitation:
1. Develop a plan as to type and content of the communications. You need to be in control so that all communications are appropriate and consistent.
- Limit the persons who are permitted to speak on behalf of your company.
- Identify those persons in your communications.
- Do not allow employees and other unauthorized persons to engage in general solicitation on your behalf.
- Review your social media policy to control and coordinate who communicates during an offering process. Social media is a danger zone as well as a tool.
- Consider your future offering needs, remembering that once you engage in general solicitation you cannot accept funds from non-accredited investors until you are safely beyond the 6-month integration period. SEC rules in this area are not clear, so be careful.
- While there are no specific disclosure/information requirements in a 506(c) offering, remember that you are still obligated to provide information needed for your potential investors to make an informed decision.
2. You will want to develop director/officer questionnaires. “Bad actors” will disqualify you from relying on Rule 506(c).
3. 506(c) will be effective September 23, 2013.