Ace In The Hole

Nuts And Bolts

Listings of stock offerings on ACE-Net are found through an online search engine that permits investors to find the type of company, technology, investment size or geography they are looking for. Once the information is found, the investor can review or download the forms filed by the listed companies. If the investor wishes to purchase stock, he or she can then contact the company directly.

According to Bibbens, companies that want to be listed on ACE-Net must go through one of several nodes, or network operators. Eight initial nodes have been designated; as of the first quarter of 1997, four were operational, with others scheduled to be online this month. The four operational nodes are the Technology Capital Network at Massachusetts Institute of Technology in Boston; The Capital Network Inc. in Austin, Texas; Accelerate at the University of California, Irvine; and Advance Technology Development Center at the Georgia Institute of Technology in Atlanta.

As for the investors, access is limited to accredited investors--defined by the Securities and Exchange Commission as, among other things, individuals who have a net worth or joint net worth with a spouse in excess of $1 million, or have net income in excess of $200,000 or joint income with a spouse in excess of $300,000 in each of the last two years and expect similar income in the current year.

Limiting access to accredited investors offers participating entrepreneurs a real advantage, says Bibbens, because it puts them in touch with individuals who have not only the interest but also the financial wherewithal to invest in their companies.

Indeed, ACE-Net is no mere electronic coffeeklatsch. ACE-Net listings consist of actual offerings that are exempt from federal registration under Regulation A or Regulation D. In other words, to be listed on ACE-Net, a company must be doing a Reg A or Reg D deal, not simply shopping a business plan. In addition, the form (U-7) used to file for a listing on ACE-Net is a SCOR form. Filling out a SCOR form is no walk in the park. Says Bibbens, "Entrepreneurs should not attempt to use this avenue without a securities attorney."

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This article was originally published in the May 1997 print edition of Entrepreneur with the headline: Ace In The Hole.

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