Young Companies Embrace the JOBS Act

Fenwick & West securities and corporate finance co-chair Jeff Vetter was quoted by Reuters Venture Capital Journal on the usefulness of Section 105(c) of the JOBS Act, which enables emerging growth companies to continue “testing the waters” even after they have filed a registration statement with the Securities & Exchange Commission.

Section 105(c) allows companies to meet with institutional investors, post-filing, to understand how these prospective stock purchasers view the company’s business and what further information the company might provide before proceeding with a public offering.

“It’s a good intelligence-gathering exercise for [these companies],” Vetter told Reuters Venture Capital Journal. In the past, such insights could only come to the companies through their investment bankers.