(Editor’s note: Attorney Benji Jones and partner at Smith Anderson in Raleigh deciphers the fuzzy crowdfunding laws and general solicitation requirements for capital-raising startups in this story as part the news partnership between WRAL TechWire and ExitEvent.)

DURHAM, N.C. – This phrase has stayed with me since first semester of Con Law—the classic expression of subjectivity. U.S. Supreme Court Justice Potter Stewart refused to identify a set of rules or a test that would define materials as “obscene” under the First Amendment; instead, he simply explained that when it comes to “hard core” pornography—“I know it when I see it.” (Jacobellis v. Ohio, 378 U.S. 184 (1964)).

As a corporate lawyer, I hate subjective standards. Give me a yes or no answer, a bright-line test, a set of rules to follow – anything to help me advise my client on how to get the deal done with as little risk as possible. Unfortunately, despite all of the statutes written by Congress and the rules and regulations promulgated by the Securities and Exchange Commission (SEC), it is almost impossible to avoid subjective standards in the world of securities regulation. Instead of Justice Stewart’s words, however, we get the all-encompassing “facts and circumstances” test.

The full story can be read online at ExitEvent.