Venture Briefing: April 19, 2017 Venture Briefing: April 19, 2017

Venture Briefing: April 19, 2017

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SEC Increases How Much Companies Can Raise Through Crowdfunding
The Securities and Exchange Commission increased the amount of money companies can raise through crowdfunding to adjust for inflation, and approved changes to benefit emerging growth companies under the Jumpstart Our Business Startups (JOBS) Act. Regarding emerging growth companies, the SEC approved amendments that adjust for inflation, a threshold used to determine eligibility for benefits offered to emerging growth companies through the JOBS Act.
(Source: Financial Regulation News, 2017-04-07) Read the full article
2017 Off to Slow Beginning for Private Equity-Backed Buyout Deals
Private equity-backed buyout deal activity fell markedly in Q1 2017, as 970 transactions were announced for an aggregate $53 billion. Preqin expects these figures to rise by around five percent as further information becomes available, but this level of activity is on par with Q1 2016, which saw widespread concerns about a slowdown in dealmaking.
(Source: Value Walk, 2017-04-04) Read the full article
Bill Aims to Create Cybersecurity Guidelines for Small Businesses
A bill making its way through the U.S. Senate proposes to do what cybersecurity experts say is long overdue: Create a set of resources and guidelines small businesses can use to protect themselves from a steadily increasing number of cyberattacks. If passed, the Main Street Cybersecurity Act, introduced at the end of March, would update the Cybersecurity Enhancement Act of 2014. This called for the National Institute of Standards and Technology to provide a voluntary set of guidelines for big businesses to follow in order to manage and reduce their cybersecurity risks.
(Source: CNBC, 2017-04-05) Read the full article
Cyber Security Attacks Have Major Effect on Company Stock Prices
Cyber security attacks have a debilitating effect on companies' stock prices, causing an average decline of 1.8 percent on a permanent basis in cases of severe breaches, according to a new report. In an analysis of 65 companies affected by hacks since 2013, security consultant CGI and Oxford Economics found that the share prices of two-thirds of firms was adversely impacted, with financial firms the worst affected.
(Source: CFO.com, 2017-04-12) Read the full article
Regulator Says New York Cyber Security Rules Should Be Precedent
A group of U.S. state insurance regulators should use New York's sweeping cyber security rules as a model for how insurers must protect their networks from hackers and when they must disclose cyber events, New York's financial regulator said. The rules lay out steps that New York banks and insurers must take to protect their networks and customer data from hackers and require they disclose cyber events to state regulators.
(Source: Reuters, 2017-04-09) Read the full article
Companies Experiencing Increase in Payments Fraud
The percentage of organizations that experienced attempted or actual payments fraud declined in the years from 2009 to 2013, but the numbers started to climb again in 2014. Last year they reached their highest level in more than a decade.
(Source: CFO.com, 2017-04-04) Read the full article
P.E. Firms Boosted Enterprise Buyout Values in First Quarter
During the first quarter, private equity firms paid a median enterprise value multiple of 10.8 times earnings before interest, taxes, depreciation and amortization, according to a report from database firm PitchBook. That's the highest level since the financial crisis, the report showed.
(Source: CNBC, 2017-04-14) Read the full article
Small Business Owners Cite Accessing Credit As a Major Hurdle
Small business owners point to trouble accessing credit and difficulty making ends meet as concerns in an otherwise optimistic outlook for their companies in the year ahead, according to newly available data from the nation’s federal reserve banks. Sixty-one percent of the companies surveyed in the 2016 Small Business Credit Survey: Report on Employer Firms said they expect revenue growth in 2017, and 39 percent anticipate job growth. But 61 percent of employer firms said they faced financial challenges in the preceding 12 months, and 44 percent cited difficulty in accessing credit or securing funds for expansion.
(Source: The Business Journals Digital Network, 2017-04-11) Read the full article
 
 
 
Headlines
Are You Timely Reporting HIPAA Breaches? OCR Settlement Emphasizes Need for Swift Breach Response

In January 2017, the U.S. Department of Health and Human Services, Office for Civil Rights (OCR) announced a settlement with Presence Health Network (Presence) to resolve potential violations of the HIPAA Breach Notification Rule. Presence is one of the largest health care systems in Illinois, and consists of over 150 locations, including 11 hospitals, 27 long-term care and senior living facilities, and a multitude of physician’s offices and clinics. Under the terms of the settlement, Presence agreed to pay a $475,000 resolution amount and adhere to a corrective action plan. Read full article online.

 

By The Numbers

The number of startups taking a second tranche of seed funds rose from 34 in 2010 to more than 830 in 2016, according to analyst Tomasz Tunguz at the venture firm Redpoint.  
Source: Quartz - Silicon Valley startups are rediscovering the benefits of being profitable

 

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Ice Miller has been one of the most active law firms in the private equity industry over the last decade, representing both entrepreneurs building great companies and the private equity firms and individuals that invest in them.  We have extensive experience with all types of funds (formations and operations); mezzanine and senior secured financing; leveraged buyouts, roll-ups, build-ups, and consolidations; divestitures and exits; and complex litigation on behalf of investors and privately financed companies.  In addition, over the past 10 years, Ice Miller has represented hundreds of emerging growth businesses in various industries on such matters as entity formation, capitalization, capital raising, alternative financing, intellectual property rights and protection, growth and exit strategies, corporate governance, tax matters, and many other legal issues that are critical to the growth and success of an emerging company.

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This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.

 
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