What kind of business might choose to raise money through a Reg A+?


#1
  • Businesses with a very large and engaged customer (or potential customer) base and social following.
  • Producers of products or services that a broad cross-section of the public will rally behind.
  • Businesses that are about to do something very large, bold, and exciting with clear and immediate potential.
  • Issuers offering ownership in a pool of high quality assets where the investment potential can be more clearly quantified than valuing a startup company, such as real estate assets or other high quality assets in an illiquid market.
  • Businesses seeking to raise a large amount of capital publicly that want to have the option to “test the waters” to gauge the interest level of their prospective investor base before committing capital to a full offering of securities.
  • Issuers who are doing a large offering privately (for example through Reg D, which would only be available to accredited investors), but want to simultaneously do a Reg A+ offering so that any of their customers who are not accredited would also have an opportunity to be involved.
  • Businesses that want the potential to have their shares be publicly tradable on an exchange without the expense of a traditional IPO.

Remember – Reg A+ offerings can often require significant legal and marketing expense budgets and should typically be considered by potential issuers seeking to raise greater than $3 million in funding. The time it takes to conduct this type of campaign should also be considered and carefully evaluated.