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Creative Fundraising from SocialMedian

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Here's a little piece of advice from Tech Crunch's Michael Arrington: If you're not a public company and you haven't registered with the Securities and Exchange Commission to make an initial public offering via the proper channels -- don't make a public offering through non-conventional channels.

 

According to Arrington's Wednesday post:

SocialMedian founder Jason Goldberg wrote a Twitter message moments ago letting people know that they are raising a new round of funding, up to $500k, and to contact him if you're interested. Great way to get investors, right? Exactly not...

That's what the Securities Exchange Act is all about, he says. Though enforcement is unlikely (especially given the message was taken down shortly after it was posted), Arrington points out that those who invested in the company and end up losing money most likely would be entitled to get their money back via rescission right -- if there's money to be had at that point.

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