Abstract Under Title II of the Jumpstart Our Business Startups Act, firms can sell private placement securities to the public via general solicitation (GS) or privately (non-GS). We find that equity offerings under GS tend to be riskier than under non-GS. After accounting for selection, GS issuers are less likely to succeed in i) raising capital, ii) getting venture capital (VC) funding, and iii) exiting via IPO or mergers and acquisitions, and incur substantial brokerage costs for advertising and verifying investor accreditation. However, GS appears to help new entrants and offerings that use registered brokers. The success of Form D financing improves future VC financing and exit outcomes.

Abstract We find that defined benefit employee pension plans of firms that are targets of hedge fund activism experience underfunding and their defined contribution plans experience reductions in employer contributions. Pension underfunding occurs due to reduced employer contributions to the plans, which target firms justify by increasing the assumed rates of returns on plan investments and the discount rate used to compute the present value of plan obligations. Despite tilting plan investments toward riskier assets, pension fund performance does not improve after activists target a firm. Our evidence suggests that shareholder wealth gains from activism are partly wealth transfers from employees.