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http://ssrn.com/abstract=1279053
 
 

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Carving a New Path to Equity Capital and Share Liquidity


William K. Sjostrom Jr.


University of Arizona - James E. Rogers College of Law

October 5, 2008

Boston College Law Review, Vol. 50, p. 639, 2009

Abstract:     
The Article advocates regulatory reforms designed to carve a new path to equity capital and share liquidity for private companies. Specifically, the reforms would allow private companies to generally solicit sophisticated investors and would foster the development of a liquid "sophisticated-investors only" (SIO) market for private company shares. The reforms are grounded in the fundamental principle of U.S. securities laws that sophisticated investors can "fend for themselves" and therefore require considerably fewer legal safeguards. As a result, the reforms would enhance capital formation by reducing regulatory burdens without compromising investor protection. The Article details the reforms and explains how they can be implemented under existing federal securities laws. It then considers the possibilities for new SIO markets if the reforms are adopted and theorizes about how the resulting securities regulatory void for SIO companies would be filled.

Number of Pages in PDF File: 46

Keywords: private placement, share liquidity, sophisticated investors, equity capital

JEL Classification: K22

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Date posted: October 6, 2008 ; Last revised: October 11, 2009

Suggested Citation

Sjostrom, William K., Carving a New Path to Equity Capital and Share Liquidity (October 5, 2008). Boston College Law Review, Vol. 50, p. 639, 2009. Available at SSRN: http://ssrn.com/abstract=1279053

Contact Information

William K. Sjostrom Jr. (Contact Author)
University of Arizona - James E. Rogers College of Law ( email )
P.O. Box 210176
Tucson, AZ 85721-0176
United States

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