Last month was pretty significant for small and emerging businesses looking to raise money. Very few noticed how big it was however because not many people know about Title IV of the Jumpstart Our Business Startups Act (the JOBS Act). When new things come into play that threaten the way things have always been done, uneasiness arises from the group getting effected. This was the case with the North American Securities Administrators Association (NASAA), who brought about a lawsuit to set aside the SEC’s rulemaking under Title IV.
The US Court of Appeals for the DC Circuit dismissed the case. Regulation A+ won a major challenge. And businesses are all the better for it. Now businesses don’t have to spend a small fortune on a traditional IPO. Reg.A+ allows them to approach both accredited and non-accredited investors in a brand new way of crowdfunding. In fact, we think it’s such a streamlined process from what it previously was that we’ve termed Regulation A+ an “IPO to go”. If you start your own research on the opportunity, you’ll quickly understand why.
With Regulation A+, companies now have a useful vehicle for raising money (and going public if desired) in a cost-effective manner with a simple offering qualification process. It’s been upheld in court! In addition to allowing companies to “test the waters” to see if their offering is truly attractive to investors, there are much lighter ongoing reporting costs for those projects that move forward with the process once the testing the waters phase yields a green light.
We predicted Regulation A+ “IPO to go” would be a game changer – and so far, it looks like we were right. We’re seeing many businesses talking with Reg. A+ consultative companies as to how the program would work best for them and then moving forward with Reg.A+ after understanding all the details involved. Why not you?
The Regulation A+ program has been in play for about a year now and has proven itself a useful and creative option for raising money. Offerings clear the review process with the SEC usually in less than two months and the review process is much less stringent that it would be doing a traditional Form S-1 registration for an IPO. In other words, the timing may be right for you to consider the Reg.A+ option for your business.