MEDIA RELATIONS - LAUNCHING A COMPANY: WOULD YOU LIKE TO SHARE?

Many biotech companies have to go through the process of raising funds in order to grow and develop their businesses. Often the fastest and easiest way is to offer shares. However, many companies are not aware of restrictions in the Corporations Act which prohibit offers of shares without a disclosure document (such as a prospectus). The logic behind these requirements is to ensure adequate information is passed to potential investors. The downside to getting the share issues wrong is significant. Not only is there potential for a hefty fine, directors may face prosecution and future investors and VC funds are likely to be scared off. The good news is that if you keep your eye on what you are doing the rules are relatively easy to follow and comply with.