Compliance — Just Another Reason We Are Winners

For Companies General September 10, 2016

Compliance — Just Another Reason We Are Winners

Online Public Offerings (OPOs) are an incredible solution for raising capital, but the path to success is not simple. Preparing a campaign requires a focused effort and there are many elements that go into a successful campaign. For our team, compliance is a key element of the process. We are diligent about compliance but we are aware startups are not as well-versed. Some of the most problematic misrepresentations will be minor, not-obvious, and in many cases, unintentional. Bottomline, we set the standards high, but we are here to help.

We not only strives to protect investors, we want ensure issuers are in good company. Compliance is not cool, it’s not sexy, but it is a selling point of StartEngine. Our dynamic approach is geared towards detecting fraud early and helping issuers create transparent, compliant and meaningful campaigns. Take a look below and learn about the system I have created and implemented to help us maintain an outstanding platform for both our issuers and investors.

  • Greenlight Review. Greenlight Review is the first step in our due diligence process. This step is to ensure a company meets the basic criteria to list on StartEngine. Our criteria are nothing extraordinary, but as part of our secret sauce I will keep details private. While the initial goal of Greenlight Review is to ensure companies meet our objective criteria for listing on the platform, it is also the first opportunity for us to detect any red flags and reject problematic issuers early — for their sake and for ours.
  • Due-Diligence. The Regulation Crowdfunding rules require a certain level of due-diligence before an issuer can go live. We take this further to mitigate the risk of fraud, bad actors or reporting inconsistencies. We request CPA and attorney contacts and conduct an Internet search to ensure everyone is in fact who they claim to be. We require that the issuer’s legal team sign off on the information entered into the platform, to the best of their knowledge.
  • Trained Team to File Form C. We put great effort into mastering the Edgar filing system. Our team offers issuers a convenient and compliant solution for an otherwise brutal task. We have seen other platforms pass this off to just anyone. I can say from experience, this is a bad idea. Filing a Form C is not as granular as it seems. We take this seriously to ensure every issuer has a complete and compliant Form C filed with the SEC.
  • Ongoing Monitoring. We not only conduct pre-launch due-diligence, we conduct monthly and red-flag reviews as well. We conduct spot checks on social media and communication channels to ensure nothing slips through the cracks, regardless of the offering length. We also set Google alerts for each and every issuer to stay on top of their marketing activities. We realize it is not our job to police issuers, but it is our job to have a robust and compliant platform.
  • We Are Smart. I hate to brag but we have a smart team. Competence is a selling point. Everyone know’s the old cliche, but if it looks like shit and smells like shit, it probably is shit. That was blunt, but they do call me Ms. Buzz Kill. Bottom line, we know when something just isn’t right, and we go the extra mile to prove ourselves right.

As well as the system explained above has worked for us thus far, it is by no mean static. As OPOs grow and evolve, our system will have to do the same. Part of my job is to stay on top of trends in the industry — via discussions with sector experts both inside and outside the company and by monitoring relevant news reports and regulatory developments. OPOs have created a nascent industry with a promising future; making sure we stay focused on compliance as the company and the industry we’re part of develop is my duty — and my obsession.

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