BREAKING NEWS: Important SEC Fundraising Rules Change for Health IT and mHealth Startups
Listen up startup health IT and Mobile Health firms seeking initial investor funding.
The SEC lifted the general solicitation ban to attract accredited investors.
This is a huge boost for health IT startups.
Now, if your firm is seeking funding, you are able to publicly announce it. You have the ability to use mass communication to solicit funding from accredited investors.
Beginning today, September 23rd, 2013, under Title ll of the JOBS Act, entrepreneurs will be permitted to publicly advertise that they are fundraising for their businesses, something that was previously illegal for the past 80 years under Rule 506 of Regulation D and Rule 144A of the Securities Act of 1933.
The intention of this SEC rule change is to make attracting funding easier for startup businesses.
As a health IT or mobile health startup, now you are able to announce that you are seeking funding on your website, in email, on social media, and on related sites, such as Startup Health.
Attracting initial funding is crucial for health IT and mobile health firms to develop products and services, market and sell their products and services, hire and train staff, and ramp up manufacturing capability if needed. Perhaps you have contacts with physicians or foundations within your network who are accredited investors and would be interested in supporting your business… if only they knew you were seeking funding?
While legal review is recommended before publishing any announcement to solicit accredited investors for funding, this is an opportunity every health IT and mobile health startup looking to build a sustainable business needs to seriously consider.
About Sam Stern
Sam is the Founder and Chief Marketing Technologist at Modallic. Modallic specializes in brand development and marketing for Mobile Healthcare Technology (mHealth) firms. As a life-long entrepreneur, Sam directs the mHealth storytelling and mHealth agile marketing process unique to the Modallic approach.