Tag Archives: Securities and Exchange Commission

Raising money – entrepenuers log book…

For the entrepreneur, everything starts with a business plan that lays out what they will be doing.  Once the plan is in place, now you have to finance your new start-up, or ongoing business that has a new “use of proceeds” for a new line of business.  This is where most entrepreneurs fail – finding money and putting it to work is an art form.  Find the wrong money, and it kills you (like factoring when your clients take too long to pay).  Find the right money at the wrong time, and you never get to use it again (commercial lines of credit when your bank uses cash flow and you are building assets).

Therefore, entrepreneurs need to be adept at securing equity, but there are so many laws surrounding this area that most entrepreneurs as well as seasoned professionals run afoul of the laws, both federal and state securities laws.  For instance, as a merchant banking organization, Rhodes Holdings LLC does not raise money – we restructure organizations, working with them to re-write their business plans with strategies that allow them to secure financing.  I, Robert Rhodes, accepted the position of Managing Member of American Equity Fund LLC (“AEF”), so that public companies that were reorganized could be offered a financing facility that was legal, and did not run afoul of these laws – specifically because AEF works with clients to file registration statements with the US Securities and Exchange Commission (S.E.C.) for the equity investment.  We would like to help entrepreneurs understand the process though; here are few articles that you should read:

© 2012 by Rhodes Holdings LLC, all rights reserved.


Finance (Photo credit: Tax Credits)



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An update on the JOBS Act

As you can guess,we have been keeping up with what the S.E.C. has been doing when it comes to the Jumpstart Our Business Startups Act (“JOBS Act“).  So far, it has been the S.E.C. has been very cautious but they are fast coming to the time when they need to weigh in on the changes to the laws in place.  Here is their recent discussion on the subject:

Here is what Fulbright & Jaworski L.L.P. has said about it:

If you haven’t been following what PPM Logix has been doing, you should.  They have some great discussion on their BLOG and they have introduced a new website: Reg D List – Funding for Private Placements.  The blog on the website is a great read as well.  Take a look at the website and if you need a reference / introduction in, just ask us.

© 2012 by Rhodes Holdings LLC, all rights reserved.

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Posted by on September 3, 2012 in BLOG, Business, Entrepenuers, Public markets


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When did “rich” become a four letter word…

Wealth in America

Wealth in America (Photo credit: uvw916a)

When did “Rich” become a four letter word?  Have you ever caught how many of the Liberal / Democratic candidates and politicians sneer when they say “Rich”?  And have you wondered why Republicans fall in line with anything that looks like it will help anyone with capital to invest [some say, invest in political campaigns]?  Let me shed some light on this situation from my point of view…

First, maybe we should look at the word “Rich”.  Here is a simple definition from

having wealth or great possessions; abundantly supplied with resources, means, or funds; wealthy.

It is very interesting to review the definition of the word “Weath” by Wikipedia (too long for this article, but a good read all the same).  I personally don’t see anything inherently wrong with having abundant resources.  What I do feel gets stuck in people’s view is the opulence that some glitterati show, almost mashing all of the world’s face in the fact that they aren’t as wealthy, pretty, etc. as they are (think about Paris Hilton here).

What even bothers me more is the hypocrisy with which the politicians of this day bandy these terms around.  First, most of the politicians are fabulously wealthy – think President Obama ($1,728,096 last year’s return), Mr. Romney ($20,901,075 estimate for last year), Nancy Pelosi (I didn’t want to add it up, but take a look).  Why are these politicians always bashing the “rich” – both Democrats and Republicans?  Because it is popular and the vast majority of Americans like to think that they are middle class.

THE TRUTH – Americans, one and all, are wealthy.  All of us.  So we should change our thinking.  Here are the steps I think that all of us in the USA should take:

  1. Start using the word “prosperous” and celebrate it – how could you be hateful or want others not to be “successful and flourishing” (part of the definition).  Semantics I know, but we all need to be careful with words.
  2. Don’t vote for anyone who spews garbage about the “rich” or ask to “sock it to the rich”, and that includes Republicans, Democrats, or Libertarians.
  3. Implement a flat tax – no deductions, no progressive tax implementation.  We all pay the same percentage of everything.
  4. Don’t favor the “rich” in anything (especially taxes) – they tend to take care of themselves, that’s why they have those abundant resources.  I tend to listen to Warren Buffet on this.

This article may seem like it favors Republicans, but let me tell you, I am personally as fed up with them as I am with Democrats.  I tend to vote Conservative, but I do not think either side is representing us well. (My opinion)…

SEC puts off implementing rules associated with the JOBS Act

[This information taken from an e-mail sent from PPM Logix]


Seal of the U.S. Securities and Exchange Commi...

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

Securities and Exchange Commission Chairman Mary Schapiro testified to Congress on Thursday, June 28th, regarding the general solicitation ban on Regulation D Private Offerings, saying “the 90-day deadline does not provide a realistic time frame for the drafting of the new rule, the preparation of an accompanying economic analysis, the proper review by the commission, and an opportunity for public input.” She went on to say “I expect that in the next two days we will publish time line for lifting the general solicitation ban and it will be done this summer.”

Read the blog at

Where have the blog entries been…

We have gotten a good amount of mail from our subscribers asking what happened to us.  First, I [Robert C. Rhodes] have been on a 13 day vacation with my kids in Washington State on Whidbey Island – what a beautiful couple weeks.  No rain, very unlike Washington, and lots of friends.  Secondly, we have signed up three new clients and are busy putting the initial consulting engagements in place.

Something struck me while I was there in Washington State – there were a lot of new cars on the road which wasn’t the case 30 years ago when I moved away, and the prosperity that is shining on Houston, Texas where I live now (actually Sugar land, but close enough) is not shining on Washington.  Many have dropped out of the work force and many, many stores are empty.


Posted by on July 13, 2012 in BLOG, Business, Public markets


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Crowdfunding, JOBS Act, and creative project funding…

JOBS Act – Title II, III and IV Explained

Title II of the JOBS Act has reversed rules on general solicitation and advertisement of a Rule 506 offering, as long as all ultimate purchasers are accredited investors. Within 90 days following enactment of the law, the Securities and Exchange Commission must revise Rule 506 to provide that Rule 502’s limitations on solicitation and advertisement do not apply to Rule 506 transactions involving accredited investors only. This makes the identification of accredited investors especially significant. Prior to the JOBS Act, purchasers have been allowed to self-certify that they qualify as accredited investors. In a departure from this long-approved practice, however, the JOBS Act provides that issuers are now required to take “reasonable steps” to ensure investors purchasing securities through a Rule 506 offering are “accredited investors.” It remains unclear what steps the SEC will require from issuers to verify that purchasers under Rule 506 are actually accredited investors. According to the 14 Law Firm Consensus Report released on April 5, 2012, the current version of Rule 506 will remain in effect until the SEC puts forward the new rules.

Read More at  This article was written by Michael T. Rave, Ronald H. Janis, Frank E. Lawatsch, Jr., David Swerdloff, Lane Watson, Veronica M. Gonzalez and Edward Bion Piepmeier.  Excerpt above from a newsletter mailing from PPMLogix, used by permission from Mr. Stapleton at PPM Logix.

Crowd funding for creative projects

There are some interesting items articles that are coming to my attention.  This one, from a client (Frank Neukomm) has a flavor for start-ups:

Startups Look to the Crowd (Yahoo! Finance)
By JENNA WORTHAM | New York Times – Mon, Apr 30, 2012 12:25 PM EDT

But here is one that I really think is interesting – project funding for creative projects.  Take a look at Kick Starter.  My sister, Jenni Rebecca Stephenson who is the Managing Director of the newly merged Fresh Arts and SpaceTaker organization, says that:

[The site] works best when it involves a product or takeaway.  The biggest challenge of Kickstarter versus some of the others it that you don’t get ANY of the money unless you can raise ALL of your goal.  That serves as motivation for some, but a barrier for others.

Space Taker has been hosting workshops with other crowd funding entities for two years!  Like Indiegogo.  Two years, my sister is way ahead of her time, and obviously more hip and happening then me (just doing SEC related work outs and helping our clients get funding by transaction structuring) – that was a little tongue and cheek, but really, Space Taker is way ahead of other arts organizations…

And then OTC Markets kicks in with their own information hub at

© 2012 by Rhodes Holdings LLC, except where noted and credited.


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