Many seeking to raise capital for their business usually use the tried-and-true Regulation D exemption from the IRS. But did you know that going the Regulation A (Reg.A) route may provide you with more flexibility, both in the short and long term? In this podcast, Mike Brette from Small Cap Equity Advisors discusses some of the options, nuances, and advantages that Reg.A provides compared to a private placement under 506(c) Reg D. But you have to do it all correctly. And one thing’s for certain: you don’t want to raise any red flags with the SEC!
Many think raising money under Reg.D is cheaper, better, and faster than doing a Reg.A. Are they right? Despite being around for a while now, not many business owners, CEOs, and issuers truly understand crowdfunding, especially Reg.A crowdfunding. When you listen to this podcast, you’ll get a better understanding of why Mr. Brette is so bullish on the topic. From its liquidity options on secondary markets, costs involved, treatment of accredited and non-accredited investors, capability of going public and listing on a major exchange such as NASDAQ, or even if you want to stay private, plus the lack of stock restrictions and immediate stock saleability for founders, insiders, and affiliates, Mike makes a strong case to at least take a serious look into the option of going Reg.A
In addition, he tackles the topics of broker/dealers, transfer agents, Tier 1 vs Tier 2 issues, PPMs, KYC/AML, crowdfunding funding portals and platforms, and the best part of all: how to raise capital doing crowdfunding correctly without losing control of your company! Learn how this all relates to Reg.A as opposed to Reg.D.
Remember: most getting involved with crowdfunding do not have a network besides friends and family. Crowdfunding is difficult and often times more expensive than originally planned and nothing is easy about it (especially the marketing part). Align yourself with industry experts who can hand-hold and guide you through the process. This is crucial!
Bonus Advice: if you plan on taking your company public at any point, take Mike’s advice and strongly consider going Reg.A from the start!