Improving Access to Capital Markets

BioRefineries/Renewable Fuel Production, Business News/Analysis, Federal Agency/Executive Branch, Federal Legislation, Funding/Financing/Investing, Securities and Exchange Commission

August 29, 2013

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by Joe Leo (Biodiesel Magazine/BrownWinick Law Firm) Let’s be honest, despite the fact that the biodiesel industry is experiencing arguably its most successful year, it is still difficult for biodiesel producers to raise capital in the current investing climate. This difficulty in accessing the capital markets, especially equity capital, is hindering the biodiesel industry’s ability to expand and implement process and technical improvements, which could improve efficiency and profitability in the industry.
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On July 10, the SEC adopted final regulations implementing this key provision of the JOBS Act. The longstanding prohibition against advertising and general solicitation in unregistered capital offerings has created difficulties in modern times when so much communication takes place through the internet and social media. In order to allow greater access to the capital markets, Congress sought to use these new communication tools to enhance the ability of companies to attract investors. Congress determined that the competing interests of investor protection versus increasing businesses’ access to capital through modern forms of communication could be appropriately balanced by the SEC.
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The bottom line is, while pursuing an unregistered capital raise using advertising and general solicitation may require additional steps in order to comply with these SEC regulations, it may provide your company access to investors who were previously unavailable, and expand the potential pool of capital available. READ MORE

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