Why You Need To Pay Attention To General Solicitation


Editor’s note:Naval Ravikant is the co-founder and CEO of AngelList. Follow him on Twitter @naval. Kevin Laws is COO of AngelList. Follow him on Twitter @kalaws.

On Monday, the legal framework for startup fundraising will change. Because of the JOBS Act, you will be able to publicly announce that you’re raising. This is not crowdfunding — you still have to raise from accredited (“rich”) investors. But, by raising in public, you will have to work harder to verify that your investors are accredited.

It has always been perfectly legal to publicly announce that you have money and are looking to invest. But it’s not been legal to announce that you have an investment opportunity and are looking for money. This is the ban against “general solicitation.” That’s why you don’t see ads to invest in hedge funds or startups, and why AngelList locks down sensitive parts of…

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