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Comment by lwb | Hacker News Reader

Is it possible to invest in the LTSE itself?

We are currently a private tech company, so only accredited investors have been able to invest so far. We hope to list publicly one day.

Didn't the SEC just change that?

Not that I’m aware of!

The change the parent is probably thinking of is that you could offer up to $5 million as a Reg Crowdfunding round (vs the previous cap of $1 million) if you wanted to offer non-accredited investors a way to invest while you are still a private company.

Wefunder or Republic or another such service would create a special purpose LLC to be the shareholder of record (or SAFE/noteholder or whatever) on your cap table.

That's not exactly how it works, but close in spirit. When you invest in Republic, you are entering into a contract called a CrowdSAFE. It's a convertible instrument much like a SAFE, but instead of converting into the next priced funding round into stock, it converts in a liquidity event directly into stock (or the cash equivalent if an acquisition for cash). There is no intermediary SPV.

What you're describing however is the way AngelList works.

The reason for this is mainly because the Reg CF terms prohibit crowdfunding investment vehicles (such as funds or SPVs).

(Source: I am former CSO of Republic)

Interesting. I've purchased a CrowdSAFE with Republic and I think that aligns with what I remember about the CrowdSAFE.

Recently though I bought shares in a private company through wefunder and the docs specify I'll be a unitholder in an SPV LLC set up by wefunder that will own the stock, so I wonder if this prohibition changed with the $5m cap change?

Dug it up. SEC updates => https://www.sec.gov/news/press-release/2020-191

Would you list on your own exchange? Is that legal?

Yes, of course. It’s turtles all the way down - that’s how the incumbent exchanges do it too :)

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