Reg A+ is a type of offering which allows private companies to raise up to $50 Million from the public. Companies looking to raise capital via Reg A+ will first need to file with the SEC and get qualification before launching their offering. The costs associated with a Reg A+ offering are much lower than a traditional IPO and the ongoing disclosure requirements are much less burdensome, effectively making a Reg A+ offering a mini-IPO.
In the beginning, we can create a “Test The Waters” window for your offering, where you are checking to see how interesting investors find your company and the idea of investing in it. For some companies, it might be in their best interests to “test the waters” before deciding whether or not to move forward with a Mini-IPO.
Create Your Offering
Once a company decides to pursue a Mini-IPO, we will work with the company to get the regulatory qualification. This process involves drafting offering documents and receiving the go-ahead from the SEC.
We will help the company draft a Form 1-A and obtain reviewed or audited financials. After filing the Form 1-A, we will work with the company to respond to any comments from the regulators and then file the final offering circular after receiving the final go-ahead from the SEC.
We will need to make your offering accurate (no hype), entertaining, and informative in a graphical and visually pleasing manner. It does not need to state the size of the capital raise you would like, the valuation, or share price at first. As time progresses, and our due diligence goes on, your offering will become more and more specific.
When your Form 1A is accepted by the SEC, our attorney and other team members will have completed the Offering Circular (like a prospectus in a traditional IPO), which will specify the details of the offering, with the necessary detail and risk disclosure.
Get Qualified by the SEC
If your offering meets with sufficient investor enthusiasm, then at some point in the offering process you will want to start your application with the SEC. You can be conservative, and wait until you are oversubscribed. Or if time is of the essence, you can start the SEC process earlier.
Regulation A+ requires detailed disclosures that are similar to but far less extensive than for a traditional public offering under the oversight of the SEC. Think of the Red Herring that you may have seen or heard of. But with simpler requirements. The process of filing for approval from the SEC to make a Regulation A+ offering involves online work using EDGAR. Form 1-A is the document that must be filed with the SEC. Dealing with the SEC is likely to be a multi-step process. It might take as little as 60 days to get SEC approval for a startup, or 90 days for an existing company, or more. The more complex the history of the company, the more involved the process will likely be.
Market Your Company Offering
One of the great things about the Reg A+ system is that you are allowed to market your company to the general public. It’s the opposite of the traditional IPO “Quiet Period”. This means that you are allowed (and you won’t succeed if you don’t do this) to market your company and gather non-binding reservations before SEC Qualification of your Offering. After SEC Qualification, you can actively market to actual investors through all methods to generate investments. Of course, doing this requires a dedicated and effective marketing program that covers all the bases – 360-degree marketing. That means testing marketing messages, the creation of a beautiful and clearly written offering that appeals to your audience, a compelling and short video, PR, advertising, social media, influencer marketing and more. Project management and the coordinated combination of all the moving parts is a significant effort that we are with you to assist.
The steps involved in “Getting Final” are these:
Convert your offering to be specific in all matters that are important to investors (we will help you learn what this includes). Our online platform has been engineered to seamlessly accept investments online, including verifying investor identities, performing anti-money-laundering checks on investors, facilitating investment document execution, funds transfer and regulatory compliance.
When your offering has exceeded its minimum as filed with the SEC, (after your Regulation A+ offering has been Qualified by the SEC), then you are ready to convert the deposits from your investors in Escrow into investments in exchange for shares of your stock. You will notify your investors.
Your transfer agent will hold the shares on the investor’s behalf, or transfer the shares to the investors’ accounts, according to the investors’ wishes.
You are allowed to successive closes until you reach the maximum that was Qualified by the SEC. This process can usually continue for up to 12 months if you file your Form 1-A correctly.
We will manage the entire closing process and ensure that all legal and regulatory obligations are met. The funds from the investors will be transferred to the company upon completion of the offering. Additionally, the platform provides messaging and managing tools for the company and investors to collaborate online before and after closing the round.