

Social Median Disregards 60 Years Of Securities Regulations With Sale Of Stock On Twitter - Mrinal
http://www.techcrunch.com/2008/08/20/social-median-disregards-60-years-of-securities-regulations-with-sale-of-stock-on-twitter/
A little lesson or a trade off - get coverage on TC :)
======
michael_dorfman
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.

~~~
Retric
There is nothing in the Securities Act which prevents someone from mailing
every single person on the planet with the message:

"I am looking for up to 500k of investments from high net worth individuals
seem me for details."

The act does cover what happens after that.

Edit: Just because techcrunch.com was wrong does not mean it's his job to
correct them.

------
ckinnan
Our securities laws seem better at creating barriers to entry for startups,
and generating fees for lawyers, than protecting investors.

~~~
Prrometheus
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.

~~~
mattmaroon
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.

~~~
Prrometheus
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.

------
rms
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?

------
webwright
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.

------
tptacek
Is there anything at all that makes Social Median more interesting than Digg
and Reddit?

~~~
dmix
No not really.

Apparently they are building it primarily as a recommendation system and not
as much a news site. Although I could be wrong.

------
briancooley
The minimum investment of $25K buys SM 2 weeks of development. How much more
runway does SM need?

Caveat emptor indeed.

------
mhartl
Something is broken when a public notice this innocuous is against the law.

~~~
Retric
It's not against the law, Techcrunch is just wrong.

------
nuggien
shouldn't it be 75 years?

