A Boon For Private Placements

The JOBS Act was signed into law three months ago today, and much of the excitement thus far has been focused on the IPO on-ramp provisions. However, the most significant, or perhaps most lasting, changes may actually result for the private placement market. Although, on a relative basis, in recent years there have been fewer regulatory reforms affecting the private placement or exempt offering market, changes in market structure and changes in the capital markets have led to greater reliance by companies on private or exempt offerings for their capital-raising needs. In February 2012, the SEC's Division of Risk Strategy and Financial Innovation published a study titled " Capital Raising in the U.S.: The Significance of Unregistered Offerings Using the Regulation D Exemption", which quite comprehensively demonstrated that private offerings have become increasingly important, especially since 2009. The study showed "a substantial shift in capital raised from public to private methods." Given the volatility of the capital markets from 2009 to 2011, it is not surprising that...