I'm a bit surprised by some of the reactions here, starting with Jason's quoted in the article update ("Wasn’t worth the techrunch headache"). It seems that there are a lot of people who either a) don't take Securities laws seriously, b) don't see the point of Securities laws, or c) think that Twitter is somehow different than other forms of publication.
To take these points in order:
First, selling shares in a company, even a privately held one, has legal implications, and shouldn't be done without consultation with a lawyer. (I'm a bit concerned that's not obvious to Jason.) If you're going to play the game, take the time to learn the rules.
Second: I really don't see how the Securities Act can be viewed to be creating unreasonable barriers to entry for startups, or stifle innovation. The regulations are fairly straightforward, and the intent is clear. Again, anyone seriously doubting this ought to talk to their attorney about the matter. And yes, you'll need an attorney if you are serious about a start-up.
Finally, for the purposes of the law, why should posting a message to the world on Twitter be considered any different than taking out an ad in a newspaper? I don't see how Jason's message could be viewed as "innocuous"-- this isn't casual, private conversation. It's publication, and Twitter users should remember that.
I understand the rationale behind most securities laws, but they definitely do stifle innovation and favor the big guys that can pay the lawyers to understand them.
Eh, it's not that bad really for the little guys. And the mega corporations can afford it.
It's clearly gone overboard and stifled the IPO market (which I guess you'd call mid-sized companies) but the only real headache for startups is that you have to make sure your investors are accredited. And, apparently, you can't post a term sheet on Twitter.
Well, we essentially have the same capital markets that we had in the 30s, frozen in time by securities laws. I just wonder how it might be easier and cheaper to raise capital today if there were the possibility for innovation.
Most of the laws that pertain to small companies are designed to prevent con artists from robbing little old ladies of their pensions. I'm not really sure how much more that would happen than it does now.
What is the difference between this and Techcrunch saying that one of the Techstars companies is raising 300k? Would it be ok if someone else twittered that Social Median is raising money?
The founder of SocialMedian was CEO of Jobster when they bought my first product startup (I worked for him for exactly 365 days). He's a really sharp cookie in a lot of ways, but did stuff like this from time to time.
He's got some great posts about the stuff he's learned since raising $48m for Jobster.
To take these points in order:
First, selling shares in a company, even a privately held one, has legal implications, and shouldn't be done without consultation with a lawyer. (I'm a bit concerned that's not obvious to Jason.) If you're going to play the game, take the time to learn the rules.
Second: I really don't see how the Securities Act can be viewed to be creating unreasonable barriers to entry for startups, or stifle innovation. The regulations are fairly straightforward, and the intent is clear. Again, anyone seriously doubting this ought to talk to their attorney about the matter. And yes, you'll need an attorney if you are serious about a start-up.
Finally, for the purposes of the law, why should posting a message to the world on Twitter be considered any different than taking out an ad in a newspaper? I don't see how Jason's message could be viewed as "innocuous"-- this isn't casual, private conversation. It's publication, and Twitter users should remember that.