REGULATION A+ IS NOT FOR EVERYONE

By Howard B. Landers,  CrowdFundBeat guest contributor, Director of Regulatory Affairs, National Crowdfunding Association and Managing Partner, eBarnRaiser, LLC
a-plus
What a great milestone!  Regulation A+ is now effective and makes raising capital (supposedly) simpler by removing certain filing burdens that have been in place at the SEC for decades.  I have read many blogs and articles heralding the coming of the new and improved Reg A+ as the magic bullet that we have all been waiting for.  My response is,

DON’T HOLD YOUR BREATH.

Howard Landers

Howard Landers

First, let me say that Reg A+ is not crowdfunding.  Reg A+ is a type of capital raise that allows issuers to have a public solicitation, have a scaled down filing requirements with the SEC, solicit unaccredited investors and have no holding period on the securities issued.  This is a modified public offering.  There are many rules to follow and tiers of capital that you must adhere to in order to qualify for a Reg A+ exemption.  A Reg A+ offering makes sense for firms that need to raise tens of millions of dollars and are in a more mature phase of business. The original Reg A has been around for decades but has never been very popular to use.  From 2009 to 2013 the number of Reg A transactions closed in the US was 16.  During the same time frame the number of Reg D, Rule 506 transactions that closed was 89,003.  In 2013 the dollars raised using some form of Reg D exemption was over $1 trillion.  While Reg A+ has yet to be tested in the real world, it is clear to see that the market prefers the use of Reg D 506.  My suggestion to those that are raising early stage capital for their companies, stick with what works and make use of Rule 506 (c).   While there is nothing wrong with the new Reg A+, it really is not for everyone.

2. David Collado, Investment Banker, 1st BridgeHouse Securties, LLC

https://ebrcapital.com/insight/wait-sec-rules-allowing-equity-crowdfunding-over/

3. Lauren Leibowitz Director, eBarnRaiser, LLC

The modifications made to Reg A are steps in the right direction for revitalizing old capital raising techniques.  There are still hurdles, costs and disclosures associated with raising capital using Reg A. Issuers need to understand each capital raising technique available in order to choose which one fits their cost/time vs. benefit profile just as a prospect Investors will need to evaluate the risk vs. reward profile when reviewing investment opportunities.

Tags: , , , , ,

HEADLINE NEWS

Marketplace.orgCrowdfunding for your lifeMarketplace.org"When I took that phone call, and I learned that this was just going to completely uproot my whole life, I'd say I spent maybe 10 seconds or so only freaking out about myself and whether or not I would die. And then imm [...]

The HinduYoung Moroccans change lives with crowdfunding - The HinduThe HinduAccess to funding is vital for young Moroccan companies. Two young men have recently developed an application that enables projects to get financed by ...and more » [...]

TIMEA Crowdfunding Effort Launches to Commemorate Khadija Saye, Artist Killed in London InfernoHyperallergicOn Saturday, friends and supporters of the artist Khadija Saye — who died in the devastating Grenfell Tower fire in west London last week — launched a crowdfunding campaign to c [...]

Santa Ynez Valley NewsTrikke Tech consolidates operations in Buellton, launches ...Santa Ynez Valley NewsTrikke Tech Inc. has consolidated all its operations at a new location in Buellton and launched a crowdfunding campaign to help the company expand and ...and more » [...]

CBS NewsNow you can crowdfund a 529 college savings plan - CBS NewsCBS NewsIt's getting easier to have friends and family add their contributions to these accounts for college savings.and more » [...]

ForbesThis $130 Million Fund Is Leading The Way In Real Estate CrowdfundingForbesWhen people think of crowdfunding, the first word that jumps to mind is Kickstarter. But crowdfunding is not limited to supporting the next card game or independent film. Crowdfunding is becoming a viable [...]

Forbes"Make Yourself Available" - An Audio Entrepreneur's Tips For Successful CrowdfundingForbesIt takes a brave individual to launch Bluetooth speakers and headphones into a crowded audio market. Take a stroll around your local consumer electronics stores and you' [...]

WMFD.comLegislation Permitting Intrastate Equity Crowdfunding PassesWMFD.comCOLUMBUS, OH - State Representative Mark Romanchuk (R-Ontario) Thursday applauded the Ohio House for approving legislation that permits, in certain circumstances, intrastate equity crowdfunding, with the goal [...]

Business InsiderCrowdfunding for medical expenses - Business InsiderBusiness InsiderAlmost half of the money raised on crowdfunding sites like GoFundMe and YouCaring is going toward medical expenses. Medical campaigns make up $930 ...Americans Losing Health Insurance Turn To Crowdfund [...]

PC GamerAshes of Creation launches 'Summer Crowdfunding Extension ...PC GamerThe ambitious MMO Ashes of Creation was successfully crowdfunded in just one day last month, before ultimately accumulating a staggering $3271809—this ...and more » [...]

CFB Finance

Syml
Lst Val
+/- Val
+/- %

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |