By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Cue the Confetti! Startups Can Begin Soliciting Investors on Monday
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > Cue the Confetti! Startups Can Begin Soliciting Investors on Monday
BusinesseHealthFinanceSocial Media

Cue the Confetti! Startups Can Begin Soliciting Investors on Monday

Deanna Pogorelc
Deanna Pogorelc
Share
5 Min Read
SHARE

health startups

Originally published on MedCityNews.com.

health startups

Originally published on MedCityNews.com.

More Read

Image
Credit Suisse Says Wearable Tech “The Next Big Thing”
Digital Disconnect: Why Won’t Clinical Trials Embrace Online Advertising?
Patient Nonadherence: A Rational Reaction to Sub-Optimal Physician-Patient Communication
Scanadu Rocks Indiegogo For $1.1M … And Counting
Making Health Addictive: Reinforce Social Connections (Part IV)

It’s a mixed bag of excitement and caution as startups prepare to finally be able to tell the world when they’re looking for investment money. The ability to advertise fundraising through social media, news articles or advertisements could open up new funding opportunities, but not everyone is expecting startups to come racing out of the gates.

Monday’s official lifting of the U.S. Securities and Exchange Commission’s ban on general solicitation will for some companies remove a long-time thorn in their side. Bon’App, which developed a mobile nutrition application, is one startup that sees the change as an exciting opportunity to try a new approach to raising capital.

“We look forward to advertising our funding activities through social media, and even have designed a webpage that will direct accredited investors to our company’s profile on Fundable,” said Taylor Salinardi, the company’s director of research and data analytics, who added that the company has taken the necessary steps to begin offering securities on Monday. “Startups spend too much time and too many resources on fundraising, so we are hopeful that these new regulations will really change the landscape for us.”

Dr. Brad Weinberg, a founding partner at digital health accelerator Blueprint Health, agreed that the changes could be huge for startups, but said there still seems to be a lot of confusion around proposed changes to Regulation D filings.

“I just hope that startups don’t start getting sued when they start tweeting without knowing what they need to do,” he said in an email.

He’s referring to the laundry list of requirements companies must meet if they choose to generally solicit their fundraising, like proving to the SEC that investors have crossed a certain income or net worth threshold and qualify as “accredited investors.” Startups that choose to generally solicit under Regulation D Rule 506 must also pre-file a Form D at least 15 days before they begin soliciting and submit any documentation they plan to use in conjunction with the general solicitation to the SEC.

Because startups are constantly pitching to potential investors, and since their pitch decks change all the time, that could get messy. “These rules are built for Wall Street, not for startup companies,” said Sean Schantzen, a former securities attorney who co-founded equity crowdfunding platform Healthfundr.

The SEC has also added a steep and intimidating punishment for failure to comply with those guidelines: disqualification from fundraising under Regulation D Rule 506 for one year after failure to timely file paperwork.

What the SEC hasn’t done, though, is add clarity to what “generally soliciting” really is. The SEC gives examples, like using an advertisement or an article to solicit the sale of securities. But regulators in the past have generally turned a blind eye to lots of activities that one might think would fall under those descriptions, such as accelerator demo days.

Because the stakes have been raised and the lines remain blurry, Schantzen thinks some startups will err on the side of caution by trying to comply with the new restrictions, even if they aren’t generally soliciting. Some of the companies he’s talked to have expressed concern about making missteps that would impact their ability to raise capital in the future. “It’s possible that a lot of companies could just treat everything as general soliticiation, which is bad because that’s adding unnecessary burdens,” Schantzen said.

“This is a major change and there’s not much precedence for it. I think a lot of companies are going to take it easy and see how things play out,” he concluded. “But we’re very bullish on general solicitation as long as the people who do it do it right.”

[Image credit: Flickr user Phil Roeder]

TAGGED:health start-ups!
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

a woman walking on the hallway
6 Easy Healthcare Ways to Sit Less and Move More Every Day
Health
September 9, 2025
Clinical Expertise
Healthcare at a Crossroads: Why Leadership Matters More Than Ever
Global Healthcare
September 9, 2025
travel nurse in north carolina
Balancing Speed and Scope: Choosing the Nursing Degree That Fits Your Goals
Nursing
September 1, 2025
intimacy
How to Keep Intimacy Comfortable as You Age
Relationship and Lifestyle Senior Care
September 1, 2025

You Might also Like

Image
Social Media

Social Health Sites to Keep an Eye On

April 8, 2012

Physician Burnout: Healthcare’s Looming Crisis

April 26, 2016
ACA health reform
BusinessHealth ReformHospital AdministrationPolicy & LawPublic Health

Health Reform Beyond the ACA: Are We Inching Towards Consensus?

October 27, 2013
telemedicine
DiagnosticseHealthMedical DevicesMedical InnovationsMobile HealthRemote DiagnosticsTechnology

Telemedicine Robots Let Doctors “Beam” into Hospitals

March 27, 2014
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?