David Kaufman breaks down impact of SEC's repeal of general solicitation in video interview with Fundology

In a historic and long-anticipated move to make private placements less “private,” the Securities and Exchange Commission this month adopted final rules allowing general solicitation and general advertising in private placements under certain conditions.

Now, the SEC says if you meet certain requirements, you can advertise your business and raise money for securities through the Internet, social media or wherever your followers are.

It’s a fundamental change in the way that securities can be offered, partner David Kaufman told Fundology in a video interview. The new requirements basically say issuers can offer securities to anyone, even if they are not considered accredited investors, a defined term under the SEC rules. Although they can be offered to anybody, only the people who actually subscribe for these securities have to be accredited investors. The company selling the securities must confirm, verify and take what the SEC has defined as reasonable steps to verify that each of these people is an accredited investor, according to Kaufman.

Until now, more and more companies trying to raise smaller amounts of money have been limited to really friends and family, or friends and family of friends, etc. Now the playing field is going to open, particularly for those trying to raise a couple of hundred-thousand or $1-2 million, Kaufman told Fundology.

Watch the full interview here.