An Innovative Link Between the Internet, the Capital Markets, and the SEC: How the Internet Direct Public Offering Helps Small Companies Looking to Raise Capital

Abstract

This Comment will examine the implications, laws, and business of DPOs completed over the Internet. This Comment will not explore in detail many novel issues surrounding this subject, such as secondary trading markets on the Internet. Section II will address the framework of DPOs with a focus on offering methods, company and investor profiles, and success factors. Section III provides a background of the Internet, including access to information and reduction of costs. Section IV covers the pertinent federal securities laws and focuses on the electronic delivery of a prospectus to ensure that optimal disclosure occurs. Section V examines the statements of key SEC officials regarding Internet DPOs. Section VI focuses on the potential hazards of fraud, risk, and lack of liquidity that investors need to be aware of and steps investors can take to protect against these dangers. Section VII discusses the potential aspects of Internet DPOs and is intended to provide information to those interested in the offering process or looking to complete an offering. This final section looks to the future of the Internet DPO and predicts how the market will look in the near future.