No Billboards, Please

Companies intending to seek funding under the JOBS Act's crowdfunding provision gained a seeming advantage in September when the SEC removed its ban on the general solicitation or advertising of certain types of private placements. But this may be less promising than it sounds, says Palo Alto-based Morrison & Foerster corporate and securities partner Timothy J. Harris: "There is a strong undercurrent in Silicon Valley that companies showing their wares this way are openly admitting that they cannot raise capital by traditional means that involve the imprimatur of professional venture capital or private equity investors. This may suggest that the company is of questionable appeal or quality."