Introducing The Reg A+ Plus Mini-IPO
Mini IPO’s Allow Companies to Raise $50 Million USD
The World Bank estimates that crowdfunding will reach $90 billion by 2020, a level that could be seen by 2017 if annual growth continues.
Discover the power of crowdfunded Mini-IPOs: Going Public with Regulation A+
“Reg A+ is about creating jobs and new opportunities. And it’s about giving regular folks access to investments that only a handful of VC and private equity bigwig investors have enjoyed up until now.”
Steve Sadler, CEO of Allegiancy
Table of Contents:
The Success Story of Elio Motors
Regulation A+ Background: The New SEC Adopted Rule
On March 25, 2015 the SEC adopted the final rule for Regulation A as a means to drive new growth and help stimulate the economy. The new rule which was put into effect at the end of 2015 is defined with 2 tiers; Regulation A Tier 1 and Regulation A tier 2 more commonly referred to as Regulation A Plus or Reg A + for short. Tier 1 is for offerings of up to $20 million and Tier 2 is for offerings up to $50 million. This new framework under Regulation A+ opens the door to a new relm of capital raising for small-mid sized enterprises which previously only large companies like Google, Caterpillar and Uber benefited from in the form of costly traditional IPO’s. Now companies are able to open “kick down?” the door to general solicitation and raise capital investments from both accredited and non-accredited investors for funding of up to $50 Million within a 12 month period. Simply put, just about everyone can now take part in a companies offering and/or Mini-IPO where as before only 2% of the population “accredited investors,” we’re allowed.
Here are some quick provisions included in the SEC’s Reg A+ rule:
- Raising Capital: Under Reg a+ Tier 2, the capital limit is $50 million, with no more than $15 million offered from affiliated stock holders. Under Tier 1 Reg A+, the capital limit is $20 million, with not more than $6 million offered from affiliated stock holders. The limits are set for 12 month periods.
- Testing the waters: Issuers may want to test the “waters” or overall effectiveness of their marketing campaign by pre-soliciting interest in the potential Mini-IPO, so long as any solicitation materials are preceded or accompanied by a preliminary offering circular.
- Blue Sky Exemption: Under Tier 2 of Regulation A+ securities are exempt from general state securities law registration and thus qualification requirements. While under Tier 1 of Regulation A+ offerings would still be subject to certain state Blue Sky regulations.
- Offering Circular: Issuers can confidentially file statements for SEC approval and qualification. According to regulation the offering circular must include in GAAP form audited financial statements and balance sheets for the two most recently completed fiscal years.
- Ongoing Reporting: Issuers that conduct an offering under Tier 2 Regulation A+ must meet certain financial obligations by electronically filing financial reports with the SEC, but under Tier 1 there are generally no ongoing reporting obligations by the issuer.
- Liquidity for Investors: Securities/Equity offered under both Tier 1 and Tier 2 of Reg A+ “restricted securities” under the Securities Act, and thus are freely tradable.
We are excited that the final A Plus (Reg A+) rules will enable growth companies to begin issuing A+ securities for 2016 and beyond. TrueCapitalfp is leading the way at advising and providing cutting edge solutions to assist companies in this new capital raising process.
Example: VidAngel Crowdfunded $5 Million in Just 28 Hours Under Reg A+
VidAngel raised $5 million through Reg A+ (Tier 2) in just 28 hours of the initial offering. The company targeted an investment goal amount of $5 million which was achieved in only 28 hours. Once their goal was reached, it didn’t stop there. They continued to accept more investment offers and secured over $10 million in about 5 days time all by posting their offering online, and all without any support from traditional brokers. According to our estimates, the company could have further achieved total capital investments to the tune of $20 to $30 million through incorporating additional online channels and extending the offer. The company, posted an aggregated net loss of $2,159,932 during the past two years. Media giant Disney had also filed a lawsuit against VidAngel. So how was all of this is possible?
We assist our clients with the entirety of the going public process, from the initial preparation and filings all the way to PR exposure once listed, to jump start investor interest towards your company’s newly listed stock. We also assist companies and executives in obtaining financing through our many partnered funds and cutting edge marketing strategies.
Pros and Cons of Crowdfunding Regulation A+ The Mini IPO
TrueCapitalfp (TCFP) Investment Banking Overview
TrueCapitalfp offers companies the opportunity to informally check offer and corporate valuation free of charge.
Whether its reverse mergers, direct public offerings or an initial public offering, we help you tackle you going public needs when efficiency and reputation are key. We also specialize in assisting companies and executives in obtaining financing, pr coverage, corporate exposure and marketing strategies.
Billions available annually via the Power of Crowdfunding!
Internet IPO/IPO-LITE Solutions – Reg A+ “Go Public”
Raise up to $50 million with Reg A+ and Go Public
Free corporate valuation
Reg A+ IPO Offering just supply audited financial statements
Experience the power of New Age Internet based crowdfunded Mini-IPOs from TrueCapitalfp an IPO Boutique Firm.
Call or email us today for a free no obligatory quote!
Why Would I Do a Reg A+ Plus Offering?
Rewarding Early Investors
Through a Regular A+ offering, startups can reward early investors with an exit strategy. Startup companies owe a large part of their success to their early investors. So, when a startup enters the growth phase they are inclined to share a large part of their success with their early investors and this comes as a reward to their contribution.
Engaging the Consumer Base
By offering consumers to take part in a Reg A+ offering, startup companies transform their consumer base into brand ambassadors. This fact has been corroborated by the research that the users who have a business interest in the growth and future prospects of a company are more inclined to endorse it and the invest more in the company.
Maintain More Control of Your Company
The Reg A+ offering is a great way to raise a large pool of capital from a multitude of investors. Getting investments from a number of investors also divides the ownership among stakeholders. Corroborated. However, the Reg A+ offering facilitates the company founders by limiting the role of individual investors and venture capitalists in the management board which otherwise can adversely impact the overall functioning of a company.
Efficient Process for Raising Capital
Companies can efficiently attract and raise capital from an eager and engaged source of capital through a Reg A+ offering. By getting investors on board, companies can proficiently get the capital in a quick in efficient matters, especially when compared to more traditional means of financing and capital raising. The testing the waters phase allows companies to test and analyze if there is potential for a public offering before opting to move forward with an official Reg A+ offering.
Who is Reg A+ Plus Mini-IPO Right For?
Companies Seeking to Raise $3 – $50 million in Capital
A Reg A+ offering is not suitable for smaller companies which are seeking an investment under $3 million, due to the cost attached with such an offering. For such small businesses, the conventional source of seed funds is more suitable.
Consumer-Facing Companies with Clear Value Propositions
Investors are more inclined to invest in companies through a Reg A+ offering which offer a cutting edge product or service, a well-defined product line to average end users and products they may use themselves. Consumer-facing companies with well-defined product/service offerings resonate well with the average investor and are well positioned for Reg A+.
Companies with Large & Engaged Followers & Consumer Base
If a company already has a larger loyal consumer base or following, it becomes easier to efficiently build brand awareness and publicity. A large, enthusiastic user base will be more likely to invest in a company, drive initial investment momentum, and be able to help a company quickly fill its round.
Companies That Want To Make a Large Splash
A Reg A+ offering helps startup companies in more ways than by just gaining the ability to tap into large capital sources raising and investments. It’s also helpful toward creating a buzz and spreading the word to a broader consumer base thus earning additional brand awareness about the company. This is why most of the Reg A+ offerings are promoted in a similar manner to the launch of a a new product. Such an approach helps make the offering a key marketing opportunity to build a company’s brand and reputation. When executed correctly, a Reg A+ offering or Mini-IPO can also be a great way to grow a company’s consumer base and brand, just as when conducting a typical product or service launch.
The Process: How to Start a Reg A+ Plus Mini-IPO
1. Qualification Process
After a company has decided to pursue a mini-IPO, they will need to spend the first month drafting a Form 1-A with the help of TrueCapitalfp (and obtain reviewed or audited financials).
After filing the Form 1-A, TrueCapitalfp will work with the company over the next 2-3 months to turn any comments from the regulators and then file the final prospectus after being “qualified” by the regulators.
Once the company/ issuer has received approval from the SEC then the company may launch marketing for its Mini-IPO or Reg A+ offering. TrueCapitalfp’s online partnered SAAS platform has been engineered to seamlessly accept investments online, including due diligence, investor verification, anti-money-laundering checks capital and potential investors, managing investor materials and distribution of said materials, capital/ funding transfer and complete legal compliance.
TrueCapitalfp will also work with the company toward providing advisory and assistance towards marketing its Reg A+ by employing a three-tiered strategy to promote the round and secure investments:
Target the company’s customers and the TrueCapitalfp investor network to build initial momentum and excitement
Target early-adopters, the company’s extended network and affinity groups
Target the public through robust press, advertising and digital campaigns
Throughout the Reg A+ offering, TrueCapitalfp will work in tandem to guide, provide assistance and oversight with the company to effectively communicate with investors, manage investor relations, and support the operations of the campaign.
3. Completion of the Offering
TrueCapitalfp provides assistance all the way to the entire closing process and market listing. While ensuring that all legal and regulatory obligations are met.
4. The listing Process
The next phase is the listing process. TrueCapitalfp works will the company through DTC eligibility, Form Drafting and Filing, Ticker Symbol Issuance, Market Maker Contracting, Investor Relations and more to provide companies with a complete Mini-IPO solution for their growth strategy.
So how can you get started? It’s easy, contact us today for a free assessment.
Full Assistance Provided
Corporate Valuation to Price Offering, Advertising and publicity, Ownership and capital structure of the issuer, Structuring of the Offering, Issuer Filing Requirements, Complete Sec Compliance Toward Highlighting issuer and offering for Advertising, Form C, Registration of Offering, Meet Compliance with all SEC and FINRA Regulations, Investor Communication and filtering, Escrow setup, Opening of investor accounts, Provision of educational materials, Investors Acknowledgement of risk, Provide Investor Subscription Agreements, Screening of Investor qualifications, Setting up and Engagement of Communication channels for issuer and investors Inquiries, Providing notices to prospective purchasers, Transmission or maintenance of funds from investors, Confirmation of transactions, Responsibility for dealing with cancellations and reconfirmations, Protect the privacy of information collected from investors, Engaging Additional Broker Dealers as Needed, Assistance with Accepting investor commitment and directing the transmission of funds.
Other Specialties Include
-Seeking Acquisition Candidates for Companies
-Direct Public Offerings