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What are the ethics of an influential venture capitalist touting their own investments in a presentation?

Jeff Elder
Profile
Title: Social media professional
Company: San Francisco Chronicle
LinkedIn Profile
(Social media professional at San Francisco Chronicle) | Jun 4, 2013

Are they generally expected to specifically disclose "this is my investment" if they tout its performance in a very large spotlight with a lot of news coverage? What about citing the good aspects of the company's performance while not mentioning the bad?

Answers

Topic Expert
Malak Kazan
Profile
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) | Jun 4, 2013

it depends on the objectives of the discussion and the audience. Is the speaker trying to encourage sophisticated investors (who can "read between the lines") for investment or are they targeting the average investor that is supposed to receive material information about the associated risk of the investment opportunity.

Jeff Elder
Profile
Title: Social media professional
Company: San Francisco Chronicle
LinkedIn Profile
(Social media professional, San Francisco Chronicle) | Jun 4, 2013

It's actually a very high-profile, general audience presentation that is seen by average people. The VC touted companies she leads investment for, but did not disclose that. One of those companies was trying to land a billion dollar deal as she touted it onstage. I don't know the rules, but seemed disclosure would at least be transparent?

Topic Expert
Wayne Spivak
Profile
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) | Jun 4, 2013

Define "touted". Is that "you should invest in X company" or is that "X Company sells widgets".

The first is a sales pitch, the second wouldn't be, but both in context could be touting...

Topic Expert
Malak Kazan
Profile
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) | Jun 4, 2013

Private investors can request more information like a PPM (private placement memorandum) and the VC should have these additional disclosure for those who want to consider making an investment (Regulation D provides more information on private placements). Here's non-SEC content / resource that explains this reg.. http://www.seclaw.com/docs/pplace.htm

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