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Report – DFIN U.S. IPO Report – October 2020

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Crowdfunding

SEC Outlines Regulatory Agenda, Exempt Securities Top the List Including Reg D, Accredited Investor Definition

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The Securities and Exchange Commission (SEC) has outlined its regulatory agenda for the coming months and at the top of the list are exempt securities that include Reg D and perhaps other exemptions such as Reg CF and Reg A+. Of note, is that the accredited investor definition may receive a change as well.

In a statement published on Friday, SEC Chairman Gary Gensler stated:

“To meet our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, the SEC has a lot of regulatory work ahead of us. I look forward to collaborating with my fellow commissioners and the dedicated staff to propose and finalize rules that will strengthen our markets, increase transparency, and safeguard investors.”

The list includes both short and long-term regulatory actions that administrative agencies plan to take.

Exempt offerings will garner additional scrutiny. According to the abstract:

“The Division [of Corporate Finance] is considering recommending that the Commission seek public comment on ways to further update the Commission’s rules related to exempt offerings to more effectively promote investor protection, including updating the financial thresholds in the accredited investor definition, ensuring appropriate access to and enhancing the information available regarding Regulation D offerings, and amendments related to the integration framework for registered and exempt offerings.”

Reg D is the top securities exemption when it comes to early-stage ventures raising growth capital. The top two iterations are Reg D 506b and Reg D 506c – with the latter allowing for general solicitation or online capital formation (crowdfunding). Any changes made could impact access to capital for promising young firms as the exemption in its current iteration has been highly effective.

The definition of an accredited investor has long been criticized by many Fintech industry insiders as too restrictive, denying opportunity to all investors. Yet there are some policymakers that believe the current wealth metrics need to be made more stringent, thus limiting access to investors even more. It is not immediately clear, what exactly, the commission has in store for any change.

Another regulatory area of note is the topic of “Gamification” something some digital investment platforms, such as Robinhood, have received criticism and encouraging trading – perhaps to the detriment of investors.

The abstract states:

“The Division [of Trading and Markets] is considering recommending that the Commission seek public comment on potential rules related to gamification, behavioral prompts, predictive analytics, and differential marketing.”

Special Purpose Acquisition Companies (SPACs), or blank check firms, have made the list as well as this sector of finance has boomed in the past year. As SPACs have increased, both regulators and elected officials have focused more of their attention on the method of taking a private firm public.

The SEC says:

“The Division [of Corporate Finance] is considering recommending that the Commission propose rule amendments related to special purpose acquisition companies.”

While any outcome is pure speculation at this time, the progress made during the last administration in areas such as access to capital and improvements to the exempt securities ecosystem could be at risk. Time will tell.

SEC Commissioner Hester Peirce, an individual well known for her support of innovation and smaller firms, Tweeted that the list may not be her “ideal list” but she is ready to work with her peers on the Commission.

There is plenty more on the SEC regulatory agenda.

The list is below or may be accessed here.


  • SEC Prerule Stage Exempt Offerings 3235-AM85
  • SEC Prerule Stage Third Party Service Providers 3235-AM95
  • SEC Prerule Stage Prohibition Against Fraud, Manipulation, and Deception in Connection With Security-Based Swaps 3235-AK77
  • SEC Prerule Stage Gamification 3235-AN00
  • SEC Proposed Rule Stage Listing Standards for Recovery of Erroneously Awarded Compensation 3235-AK99
  • SEC Proposed Rule Stage Corporate Board Diversity 3235-AL91
  • SEC Proposed Rule Stage Disclosure of Payments by Resource Extraction Issuers 3235-AM06
  • SEC Proposed Rule Stage Mandated Electronic Filings 3235-AM15
  • SEC Proposed Rule Stage Rule 10b5-1 3235-AM86
  • SEC Proposed Rule Stage Climate Change Disclosure 3235-AM87
  • SEC Proposed Rule Stage Human Capital Management Disclosure 3235-AM88
  • SEC Proposed Rule Stage Cybersecurity Risk Governance 3235-AM89
  • SEC Proposed Rule Stage Special Purpose Acquisition Companies 3235-AM90
  • SEC Proposed Rule Stage Rule 14a-8 Amendments 3235-AM91
  • SEC Proposed Rule Stage Proxy Voting Advice 3235-AM92
  • SEC Proposed Rule Stage Disclosure Regarding Beneficial Ownership and Swaps 3235-AM93
  • SEC Proposed Rule Stage Share Repurchase Disclosure Modernization 3235-AM94
  • SEC Proposed Rule Stage Reporting of Proxy Votes on Executive Compensation and Other Matters 3235-AK67
  • SEC Proposed Rule Stage Amendments to the Custody Rules for Investment Advisers 3235-AM32
  • SEC Proposed Rule Stage Amendments to Rule 17a-7 Under the Investment Company Act 3235-AM69
  • SEC Proposed Rule Stage Amendments to Form PF 3235-AM75
  • SEC Proposed Rule Stage Money Market Fund Reforms 3235-AM80
  • SEC Proposed Rule Stage Rules Related to Investment Companies and Investment Advisers to Address Matters Relating to Environmental, Social and Governance Factors 3235-AM96
  • SEC Proposed Rule Stage Electronic Submission of Applications for Orders Under the Advisers Act, Confidential Treatment Requests for Filings on Form 13F, and ADV-NR 3235-AM97
  • SEC Proposed Rule Stage Open-End Fund Liquidity and Dilution Management 3235-AM98
  • SEC Proposed Rule Stage Registration and Regulation of Security-Based Swap Execution Facilities 3235-AK93
  • SEC Proposed Rule Stage Prohibition Against Conflicts of Interest Relating to Certain Securitizations 3235-AL04
  • SEC Proposed Rule Stage Incentive-Based Compensation Arrangements 3235-AL06
  • SEC Proposed Rule Stage Broker-Dealer Liquidity Stress Testing, Early Warning, and Account Transfer Requirements 3235-AL50
  • SEC Proposed Rule Stage Transfer Agents 3235-AL55
  • SEC Proposed Rule Stage Electronic Filing of Broker-Dealer Reports 3235-AL85
  • SEC Proposed Rule Stage Electronic Filing of Form 1 and Form 1 Amendments; Form 19b-4(e) 3235-AM09
  • SEC Proposed Rule Stage Short Sale Disclosure Reforms 3235-AM34
  • SEC Proposed Rule Stage Market Structure Modernization 3235-AM57
  • SEC Proposed Rule Stage Portfolio Margining of Uncleared Swaps and Non-Cleared Security Based Swaps 3235-AM64
  • SEC Proposed Rule Stage Records to be Preserved by Certain Exchange Members, Brokers and Dealers 3235-AM76
  • SEC Proposed Rule Stage Trading Prohibitions Under the Holding Foreign Companies Accountable Act and Enhanced Listing Standards 3235-AM81
  • SEC Proposed Rule Stage Loan or Borrowing of Securities 3235-AN01
  • SEC Proposed Rule Stage Amendments to the Securities Transaction Settlement Cycle 3235-AN02
  • SEC Proposed Rule Stage Amendments to the Commission’s Whistleblower Program Rules 3235-AN03
  • SEC Final Rule Stage Pay Versus Performance 3235-AL00
  • SEC Final Rule Stage Universal Proxy 3235-AL84
  • SEC Final Rule Stage Filing Fee Disclosure and Payment Methods Modernization 3235-AL96
  • SEC Final Rule Stage Rule 144 Holding Period and Form 144 Filings 3235-AM78
  • SEC Final Rule Stage Tailored Shareholder Reports, Treatment of Annual Prospectus Updates for Existing Investors, and Improved Fee and Risk Disclosure for Mutual Funds and ETFs; Fee Information in Investment Company Ads 3235-AM52
  • SEC Final Rule Stage Exemption from the Definition of “Clearing Agency” for Certain Activities of Security-Based Swap Dealers and Security-Based Swap Execution Facilities 3235-AK74
  • SEC Final Rule Stage Establishing the Form and Manner With Which Security-Based Swap Data Repositories Must Make Security-Based Swap Data Available to the Commission 3235-AL72
  • SEC Final Rule Stage Regulation ATS for ATSs That Trade U.S. Government Securities 3235-AM45
  • SEC Final Rule Stage Amendments to NMS Plan for the Consolidated Audit Trail-Data Security 3235-AM62

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Source: https://www.crowdfundinsider.com/2021/06/176549-sec-outlines-regulatory-agenda-exempt-securities-top-the-list-including-reg-d-accredited-investor-definition/

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SPACS

Mark Cuban-backed banking app Dave going public via $4 billion SPAC

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  • Banking app Dave announced Monday that the company will make its market debut through a SPAC merger with VPC Impact Acquisition Holdings III.
  • The company has attracted institutional investors including Tiger Global who now value the fintech start-up at $4 billion, more than triple its last reported private valuation.
  • It plans to list on the New York Stock Exchange under ticker symbol DAVE.

Banking app Dave announced Monday that the company will make its market debut through a SPAC merger with VPC Impact Acquisition Holdings III.

The agreement values Dave at $4 billion and is expected to close in the second half of this year. Upon completion of the deal, it intends to list on the New York Stock Exchange under ticker symbol DAVE.

The company, ranked No. 26 on last year’s CNBC Disruptor 50 list, was most recently valued at $1 billion in August 2019, according to PitchBook data.

Victory Park Capital, a global investment firm headquartered in Chicago, has a long track record of debt and equity financing transactions in fintech, and has been a longstanding investor in Dave, most recently providing a $100 million credit facility to the company in January 2021. VPCC completed its initial public offering in March 2021.

Dave — shorthand for the hero in the David vs. Goliath tale — is designed to eliminate many of the features customers can’t stand about legacy banks. The company started with overdraft fees. For a $1-per-month membership fee, users can access checking accounts with no fees and up to $100 in overdraft protection without fees or interest. Members who sign up for direct deposit also get automated budgeting and the ability to build up their credit scores through the reporting of rent and utility payments to credit bureaus.

The company says it has helped its customers avoid nearly $1 billion in overdraft fees through its ExtraCash feature, and helped gig workers earn more than $200 million from their side hustles through its sharing-economy job board, Side Hustle.

Co-founder and CEO Jason Wilk, who founded three other start-ups and counts Mark Cuban as an early investor, believes consumers should get credit for doing the right thing consistently.

“At Dave, we’re committed to improving the financial health of our members,” Wilk said in a statement announcing the deal. “We believe the legacy financial system has failed to deliver and today, more than 150 million people need our help to build financial stability.”

The deal includes a $210 million private placement led by Tiger Global Management. So-called PIPE financing is a mechanism for companies to raise capital from a select group of investors that make the final market debut possible. Wellington Management and Corbin Capital Partners are also participating.

SPACs have come to market at a breakneck pace over the past year as an alternative to IPOs. However, the market has cooled lately amid regulatory concerns and an overall pullback in SPAC stocks. The CNBC SPAC 50 Index, which tracks the 50 largest U.S.-based premerger blank-check deals by market cap, has slumped roughly 4% year to date, while the Nasdaq has gained roughly 7%.

So far this year, 330 SPACs have raised nearly $105 billion, according to SPAC Research, but experts caution investors that the recent frenzy, and subsequent slump in SPAC shares, could lead to riskier deals in the coming months.

Source: CNBC – Mark Cuban-backed banking app Dave going public via $4 billion SPAC

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Digital Ad Startup Minute Media Explores Going Public

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  • Mental Floss, Players’ Tribune owner weighing IPO or SPAC deal
  • Goldman Sachs advising company on plan to go public this year

Digital advertising company Minute Media is working with Goldman Sachs Group Inc. on a plan to go public as soon as this year, according to people familiar with the matter.

Minute Media, which owns brands including Mental Floss and the Players’ Tribune website started by former baseball star Derek Jeter, is considering an initial public offering or a listing through a special purpose acquisition company, the people said, asking not to be identified because the matter is private.

The company would seek to be valued at more than $1 billion when it lists its shares, the people said. It was valued at about $500 million after raising funding last year, according to data provider PrivCo.

The discussions are in an early stage and Minute Media’s plans could still change.

A representative for Minute Media didn’t immediately respond to a request for comment. A Goldman Sachs spokesperson declined to comment.

Minute Media, founded in Israel in 2011, has offices in New York, London and Tel Aviv, according to its website. It also owns the sports publications FanSided and the Big Lead, which it bought from from Gannett Co.

Growth-starved digital media companies have been merging or looking to go public. Vice Media Inc. and Buzzfeed Inc. have been exploring SPAC deals this year, Bloomberg News reported.

Minute Media has raised about $156 million to date from investors including Battery VenturesProSiebenSat.1 Media SE and Goldman Sachs, PrivCo data shows.

Source: Bloomberg – Digital Ad Startup Minute Media Explores Going Public

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Source: https://spacfeed.com/digital-ad-startup-minute-media-explores-going-public?utm_source=rss&utm_medium=rss&utm_campaign=digital-ad-startup-minute-media-explores-going-public

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SPACS

[Webinar] When the Dust Settles: A Closer Look at the SPAC Boom and Potential Litigation to Follow

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As special purpose acquisition company (SPAC) IPOs and mergers continue to exceed market expectations, investors, executives, and financial institutions are becoming increasingly wary of an anticipated onslaught of litigation posed by these transactions and their unique potential risks and challenges. SPAC structures and their inherent volatility open them up to a host of potential claims. For investors and potential target companies, there are two critical questions: what are those claims and will they actually affect the bottom line?

In this webinar, Adam Sisitsky moderates a panel of Mintz litigation attorneys including Nancy Adams, Jack Sylvia and Kristen White as they explore the rising risk of litigation and regulatory enforcement facing SPACs and the individuals that lead them. Topics included the current SPAC litigation landscape, SPAC M&A–related litigation, including disclosure issues and breach of fiduciary duty in the de-SPAC process, D&O coverage challenges and risk mitigation and heightened SEC scrutiny.

Source: The National Law Review[Webinar] When the Dust Settles: A Closer Look at the SPAC Boom and Potential Litigation to Follow

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Source: https://spacfeed.com/webinar-when-the-dust-settles-a-closer-look-at-the-spac-boom-and-potential-litigation-to-follow?utm_source=rss&utm_medium=rss&utm_campaign=webinar-when-the-dust-settles-a-closer-look-at-the-spac-boom-and-potential-litigation-to-follow

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