On October 17, 2013, Fantex Holdings launched an “all-new marketplace that allows investors to buy and sell Fantex, Inc. stock linked to the value and performance of the brand of a professional athlete.”1 The Initial Public Offering will be called a “Fantex Series Arian Foster Convertible Tracking Stock.”2 The offering has been subject some confusion….
Month: October 2013
Is Venture Capital a Tool in Community Development?
In 2003, the Over-the-Rhine district in Cincinnati, OH experienced 90% vacancy, high crime and blight. Enter: the Cincinnati Center City Development Corporation (“3CDC”). As a non-profit organization, the 3CDC has managed two major mostly-private investment funds (the Cincinnati New Markets Fund and the Cincinnati Equity Fund) to land bank properties and redevelop the spaces into…
SEC’s Focus on Broker-Dealer Registration
SEC has recently made broker-dealer registration an area of focus for private fund managers. This is bad news for the private equity industry, as the burdens and costs of registration and on-going compliance with SEC requirements are substantial. The regulatory framework starts with Section 15(a) of the Exchange Act, which requires that persons engaged in…
How the Foreign Account Tax Compliance Act Will Impact Foreign Financial Institutions and How to Incentivize Compliance
What is FACTA and who is affected by it? The Foreign Account Tax Compliance Act (FATCA), coming into effect in July 2014, requires any Foreign Financial Institution (FFI) that elects to comply with the Act to do three things: 1) identify its U.S. account holders; 2) annually report the account holders to the IRS; and 3) withhold…
Microsoft Ventures: A Three Pronged Benefit Program
Through venture capital, many small startup tech businesses have been able to obtain the necessary funds to start their business. The success of these startups provides investors with not only an opportunity to profit on the new organization’s success, but also allows many large corporations to invest in startups as a means to spread their…
A New York State of Mind: In-State Private Equity Program Invests in New York Start-Ups
Originally founded by the State of New York Comptroller’s office in 1999, New York’s In-State Private Equity Program has certainly made an impact on the state’s best and brightest new businesses.1 Since its creation, the program has intended to support native New York businesses while also generating hopefully solid returns for the state.2 Historically, and…
REITs v. Private Equity Real Estate
For institutional investors such as public pensions or insurance companies, real estate can play an important part of an investment portfolio. As an asset class, real estate has several qualities that make it an attractive alternative to more traditional investments like stocks or bonds. Real estate can generate attractive current income yields, and as a…
Conflict of Interests in Private Equity Funds
Until recently, the SEC’s Division of Enforcement focused its enforcement efforts on hedge fund managers who breached their fiduciary duties to clients or engaged in other types of fraudulent conduct. However, the growth of the private equity industry has not gone unnoticed by the SEC, and there have been a wave of enforcement actions against…
Strategic Deregulation: Potential Impacts of Allowing Foreign Private Equity Fundraising in China
How the Chinese government chooses to open up sectors of its financial industry will dictate the returns that investors may receive. Recent deregulation is beneficial because it affords Chinese investors an alternative avenue to invest savings, but significant hurdles remain before domestic private equity (PE) funds will be able to reinvest in domestic startups. The…
Should You Form an LLC or C-Corporation?
If you are considering this question, you already have a business concept, a business plan (hopefully), and have done enough market research to ensure that your idea will have some traction and solve some pain point. But, you are unsure of which business entity to choose. Both entity types have their pros and cons, which…