It began with announcements like this from AngelList. For just $99 plus $25 per investment, wefunder will let you create a create a “beautiful profile” and send updates to followers, and provide free investment contracts, accredited investor verification, an escrow account and an electronic signature service. SecondMarket is offering a similar solution. Heck, you can even invest in flying cars. You can find a pretty good summary of the madness here.
The SEC issued an investor alert on general solicitation and another one on the definition of accredited investors. The SEC even has a page where you can voluntarily upload your general solicitation. We’re not sure why anyone would want to do this, unless you’re trying to earn a good citizen award, and if you saw a slimy scheme and want to make a whistleblower tip and collect a reward, this is the wrong page. In addition, the SEC issued a Small Business Compliance Guide entitled “Disqualification of Felons and Other “Bad Actors.” Hat tip to Broc Romanek of TheCorporateCounsel.net for pointing all this out.
For other information on Regulation D and general solicitation, see JOBS Act and Other Securities Law Essentials for Growing Companies.