One of the greatest features of Regulation A+ offerings is its “end game” flexibility. Companies can raise a significant amount of money using Reg.A+, and they can do it without the requirement of doing a “traditional” IPO and ending up on NASDAQ – unless they want to. In fact, the goal of many companies using Regulation A+ is to be listed on an OTC market after their equity raise is complete.
The fact of the matter is when businesses consider going with an IPO, you’re talking significant money, costs, regulations, and time to get it all done. That means small time companies have been basically shut out of traditional IPOs for the longest time. Until now, because Regulation A+ brings the best of an IPO and makes it faster and easier. That’s why we call them “IPOtogo“s.
With Regulation A+, smaller size companies now have access to all kinds of investors (both accredited and non-accredited) which allows the company a vehicle for unprecedented growth potential. Reg.A+ offerings are the “2016-and-beyond” way of doing an IPO with an eye towards a listing on the NASDAQ or NYSE. They’ve been proven to have so many advantages over a “traditional” IPO that, at this point, you’d have to truly wonder about the financial sophistication of anyone touting the “IPO old-way” of raising money. Here are a few reasons why:
- Regulation A+ Offerings are much more immune to stock market ups and downs. This is simply because most investors already like and trust the company they’re investing in and are their evangelists in the first place!
- A traditional IPO requires a certain “quiet period” which Reg.A+ deals do not. Who wants to raise money but not be able to tell people about it? How crazy is that? Reg.A is completely the opposite. (And social media makes it quite easy to get the word out on your deal – and it’s completely legal to do so in this manner!)
- Many traditional IPOs fail because they miss their minimum raise amount to list on a major exchange. Not so with Regulation A+! In fact with Reg.A, most offers have no minimums. Plus you can raise money in steps, meaning you can do an early first closing for a small amount of money, then use that to fund larger marketing efforts to potential investors to raise a more significant amount which reduces costs all around.
- The potential for investors is enormous! Traditional IPOs get offered to only very select wealthy investors. Regulation A+ offerings can be successfully promoted on a cost-effective manner to all investor types on a worldwide basis. When a company partners with those who know how to do this (especially via social media), the potential for success skyrockets!
- The testing the waters phase of a Regulation A+ offering is a failsafe! It allows companies going the Reg.A+ route to market to their investors while their offering is actually underway in order to determine the potential success (or failure) of their offering. This point alone could save literally hundreds of thousands of dollars versus the “blind-pool strategy” of an IPO.
All this reinforces the idea that an IPOtogo makes more sense for most small cap companies than a traditional IPO does. In reality, unlike for the “big boys”, the IPO market for small cap companies hasn’t really existed in the real world for over 2 decades. But now, Regulation A+ has leveled the playing field and is providing the impetus for a brand new way of raising money that’s making the traditional IPO obsolete.
However, Regulation A+ is still in its infancy which means there are a number of kinks to knock out. But one thing we’re standing by with at the Reg A+ Funding Group:
In a few years time, the IPO will be a dinosaur and you’re going to see Reg.A+ become the new “traditional” means of raising money… and the early adapters that start this process today will have great stories to tell!