Pre-Public Funding — Lessons From Facebook

Law360, New York (January 12, 2012, 2:49 PM EST) -- Recent developments relating to Facebook and its efforts to raise capital privately, while avoiding triggering a requirement to become a U.S. Securities and Exchange Commission public reporting company, have piqued the interest of some private equity funds.

The first development was the much-publicized effort by Goldman Sachs to create a fund for investment by its accredited clients in Facebook before a widely expected initial public offering. Because Goldman's private placement generated national media attention that seemed inconsistent with a securities law prohibition on "general solicitations," Goldman...
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