Reg A+ Offering : 8 Tips to Funding Success

By Rod Turner  founder and CEO of Manhattan Street Capital, Crowdfundbeat Guest Editor,

The doors to Reg A+ are now open, with approximately 100 filings, 29 qualified by the SEC, to seek an average $23 million goal. The aggregate capital being sought is now $1.5 billion. The first company to complete a Reg A+ offering, Elio Motors, raised $16.9 millionfrom 6,600 investors at a pre-money valuation of $300 million, and is now listed on the OTCQX.

Reg A+ Offering








If you’re considering raising funds with Reg A+, check out the following tips: 

1. Don’t Underestimate The Importance of Consumer Appeal. In private equity, beyond providing enough of the right evidence to prove market validation, the venture capital (VC) investors are the only people you need to impress. In a classic IPO, the marketing and press you can do pre-opening is strictly regulated. But with Reg A+, broader marketing is not only allowed, it will be vital in securing the interest you’ll need to get the investors you require on board. Get the right kind of 360-degree marketing agency in place immediately (which can be surprisingly cost effective when your company is a great “fit” for Reg A+).

Reg A+ is unlikely to be right for your company if your products do not appeal to consumer investors, even if the fundamentals are strong. That is simply because the cost of reaching investors that are attracted to a purely financial return is far higher than for attracting consumer investors. Investors looking for a great return are more likely to wait for Reg A+ to develop a proven track record before acting.

2. Consider this method for raising your up front cash: Angel or VC investors that invest in your company to pay for the cost of the Reg A+ offering can sell their shares in the Reg A+ offering as a reward for them putting up the capital. The percentage of their shares that you offer to make liquid is up to you, the company, to choose. Of course, you cannot guarantee the Reg A+ offering will succeed or that it will reach its maximum. And no more than 30 percent of an offering can be from selling insiders. Typically, there will be a step up in valuation from the Angel/VC round, which can be motivating to the VC or Angel (accredited) investors. There is no Rule 144 holding period restriction on this transaction.

3. Be sure your offering pitch is truly compelling, and plan to launch with high impact marketing. Remember, this is not just about logic and the quality of your team and company; it is about the emotional appeal you create (and your personal credibility). Keep your video short and engaging so the audience watches every second and comes away wanting more. Build momentum rapidly with front-loaded effort. Early traction builds success for the whole campaign.

4. Offer rewards. Attractive awards (similar to those on Kickstarter) can help. A lot in Reg A+

5. Don’t be fooled by the amount of your Test The Waters reservations. Know ahead of time that casually made reservations will overstate the true investment potential on hand. Conservatively compress them down to know where you really stand.

6. Don’t expect rapid results. This is a process that takes time. Your Reg A+ funding will generally take 4-6 months to complete; perhaps the shortest possible time is 90 days if you start the SEC filing and the marketing simultaneously – which I generally do not recommend. The set-up for your TestTheWaters(TM) offering and comprehensive marketing campaign will usually take six weeks.

7. Be careful to keep your valuation at a sensible level. One problem in raising capital from consumer investors is that you may be able to get a valuation that is too high, as they tend to be less valuation sensitive than seasoned angel investors. Yes, you heard that right – you could get more money for less stock in the near term by pushing for the highest valuation possible. But if the valuation isn’t sustainable, your investors will hate you later. You want happy investors who will spread the word about your products and strengthen your brand, for the greatest long-term success.

8. Investor due diligence matters. Be selective about which investors you accept, above and beyond the SEC requirements. Do full due diligence to reduce the risk of future lawsuits and to make for a smoother journey with thousands of shareholders.

With this guidance in hand, you are on the first step to dynamic funding success.


Rod Turner is the founder and CEO of Manhattan Street Capital, helping successful mid-stage and mature, low risk startups to raise the capital they need to scale faster under the newly-approved criteria of Regulation A+. Turner has played a key role in building six successful companies including Symantec/Norton, Ashton Tate, MicroPort, Knowledge Adventure, and ArtSlant, Inc. He is an accomplished investor who has built a Venture capital business (Irvine Ventures) and has made angel and mezzanine investments in companies such as Bloom, Amyris, Ask, and eASIC.









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