The Solution Eases the Burden and Helps Entrepreneurs Create and File Their Own Form C Securities Disclosure With the SEC, Which Is Mandated Under the Agency’s New Crowdfunding Rules
NEW YORK, NY–(Marketwired – May 13, 2016) – iDisclose, announced today that several of the leading new Title III Crowdfunding funding portals at various stages in the SEC and FINRA approval process will be using iDisclose either on an exclusive basis or as a tool they can offer to assist issuers on their portals. Funding portals committed to compliance are choosing iDisclose as a low cost high quality legal solution. Condensing the 686 pages of SEC rules in Regulation Crowdfunding into one streamlined application was no small feat, but it was essential to iDisclose to assist entrepreneurs through the regulatory process and ensure funding platforms comply with the new regulations. iDisclose is looking forward to working with Republic.co, the new AngelList spin-off currently making its way through the SEC and FINRA application process; Funding Wonder, a Title III platform candidate with a unique focus on small business loans and SeedInvest, an experienced Title II and Title IV platform now entering the retail crowdfunding space.
Former Chief of the Office of Small Business Policy at the SEC, securities regulation consultant and iDisclose advisory board member Gerald Laporte said, “as excited as we are for the launch of investment Crowdfunding and the promise that it holds for entrepreneurs to more efficiently raise capital online, as a securities lawyer, I am mindful of the required securities disclosure that is not only required by the new rules but the practical need to properly advise potential investors both as to the opportunity and all of the risks, that is where iDisclose comes in.”
Co-founder and CEO Georgia Quinn stated that “at iDisclose, we are empowering entrepreneurs to actually comply with the lengthy and detailed regulations set forth by Regulation Crowdfunding. We, like this new industry, are an example of how technology can overcome traditional challenges faced by small and startup businesses when it comes to raising money. I love what we are doing because we protect both the issuer and the investor — there are no losers here.”
Co-founder and CEO of Republic and AngelList alum Kendrick Nguyen said, “few people understand this space better than Georgia. Republic’s collaboration with iDisclose has been important to our development of a product that meets regulatory best practices and is also manageable and affordable to issuers.”
Funding Wonder co-founder and CEO Michael Mildenberger stated, “Title III offers an exciting new way for small businesses to secure debt financing from non-accredited investors but the process must be as frictionless as possible. iDisclose is our secret sauce to easily and efficiently generate required documentation.”
iDisclose has also partnered with Priori Legal and Legal Hero, two leading on-demand curated legal marketplaces, to allow users to purchase an “attorney upgrade” and work with an experienced attorney to help them through the process and provide a final legal review. The use of these two providers also ensures an ultimately scalable solution as the industry grows. All services are at transparent flat rates, so entrepreneurs know what to expect and can budget accordingly. iDisclose provides an end to end legal solution, including the attorney upgrade, for businesses conducting a Title III crowdfunding for $3,500 or less.
“There’s so much excitement among entrepreneurs about these new regulations,” said Legal Hero’s co-founder and CEO Annie Webber. “Crowdfunding is a great way to raise funds but it is not foolproof and the legal issues are complicated. iDisclose has created a product that will absolutely be the leader in the market and we’re thrilled to be a partner.”
“We’re pleased to partner with another New York-based legal tech company,” said Parsa Pezeshki, Priori Legal’s Head of Business Development and Market Strategy. “This is an advantageous opportunity for all parties involved: entrepreneurs, crowdfunding portals, iDisclose, and for us, at Priori Legal, where we’re excited to be sharing access to our pre-vetted platform attorneys at exceptional price-points.”
Tom Glocer, former CEO of Thomson Reuters, founder and managing partner of Angelic Ventures, LP and advisory board member of iDisclose explained that, “the introduction of the new crowdfunding rules has created a unique opportunity for early stage growth companies to tap the capital markets. iDisclose allows issuers and their advisors to automate much of this process and I can’t think of a better way to balance legal compliance with a cost-effective and streamlined process that will appeal to tech-enabled issuers.”
iDisclose’s Form C application is being released contemporaneously with the May 16theffectiveness in the U.S. of the SEC’s new Title III Regulation Crowdfunding rules and is available at idisclose.com or through its partner funding portals.
“Equity crowdfunding has the potential to become the standard way that early-stage startups and small businesses raise capital, but only with the development of scalable tools that continue to bring down the cost and complexity,” said SeedInvest CEO Ryan Feit. “At the end of the day, speed and simplicity is what will drive entrepreneurs to utilize equity crowdfunding over slower, more traditional avenues for raising capital.”
Built by some of the brightest minds in securities law, iDisclose fuses cutting-edge technology with legal know-how to significantly reduce the time, money and effort traditionally exerted on the disclosure process.
“We join in celebration with the entire new securities-based Crowdfunding industry as the U.S. welcomes the opening to all investors the opportunity to invest in exciting new and established private companies this May 16” said Douglas Ellenoff, Co-Founder and Chairman of iDisclose and founder of New York law firm Ellenoff, Grossman & Schole.
In September, iDisclose announced its first application release for the comprehensive use in creating a full private placement memorandum (PPM) for offerings under Regulation D of the Securities Act of 1933 and has partnerships with Title II funding platforms such as RealtyXE and Sprowtt.com.
In addition to entering into agreements with funding platforms, iDisclose has also released a white label solution for lawyers and law firms to offer both the PPM and the Form C application to their clients.
iDisclose puts the job of disclosure back into the hands of the entrepreneur, eliminating the inefficiencies of the traditional method and substantial time to comply with the rules and saving thousands of dollars as well. Rather than provide un-contextualized information about a business to a lawyer, and then relying on the lawyer to prepare the first draft, the entrepreneur responds to an online dialogue to draw out the relevant disclosure issues and the platform organizes the information into a legal document. Throughout the entire process, the entrepreneur is able to collaborate with their own team and attorney as needed, and to send their attorney their document drafts for final review and sign-off.
iDisclose also generates a Red Flag report of key issues that must be addressed, which can also be shared with an attorney for further advice and counsel. In addition, the platform creates a list of Risks Factors that are seamlessly organized within the document for easy review by investors. Target groups that benefit from iDisclose include:
- For Businesses: The platform allows you to create your own legal documents at a reduced time and cost.
- For Investors: iDisclose provides fulsome disclosure in an easy to evaluate format.
- For Fundraising Platforms: iDisclose allows platforms to offer a value-added service to their users and standardizes the disclosure format across the entire platform.
- For Lawyers: It eliminates much of the drafting drudgery required with the disclosure process, and allows lawyers to focus on the true aspects of being a lawyer (offering real legal counsel, guidance and reviews).
iDisclose was developed by Douglas Ellenoff and Georgia Quinn of Ellenoff, Grossman & Schole, who are both award-winning, NY-based corporate attorneys and globally-recognized figures in the alternative finance space. Having both facilitated hundreds of corporate financings over the course of their careers, the founders harness a deep understanding of the disclosure process, as well as the issues businesses face when raising capital.