What is a Reg D 506(c) filing?

Rule 506(c) permits issuers to broadly solicit and generally advertise an offering, provided that: all purchasers in the offering are accredited investors the issuer takes reasonable steps to verify purchasers’ accredited investor status and certain other conditions in Regulation D are satisfied Purchasers in a Rule 506(c) offering receive “restricted securities.” A company is required to file a notice with the Commission on Form D within 15 days after the first sale of securities in the offering. Although the Securities Act provides a federal preemption from state registration and qualification under Rule 506(c), the states still have authority to require notice filings and collect state fees.

What is a Reg A+ filing?

  • Regulation A+ allows companies to raise $75 Million per year from accredited and non-accredited investors.
  • For companies that are looking for a more practical and cost-effective way to go public on the NASDAQ or keep control of their company, Regulation A+ dramatically improves their funding prospects. As a result, capital raising options have completely changed; Reg A+ also offers additional attractive listing options after the offering is complete. A successful Regulation A+ offering is best suited to companies with strong consumer appeal and a large and happy customer base. Regulation A+ shares, after an offering, are considered liquid by the SEC; there is no lockup period unless your company requires one. It is not a requirement, but Reg A+ can be used to list a company on the NASDAQ. An S-1 IPO is often more expensive than a Reg A+ IPO. In March 2015, the Securities and Exchange Commission adopted final rules and defined Regulation A with two tiers. Tier 1 allows raises of $20M, while Tier 2 allows raises of up to $75M. They have the following characteristics: Tier 1 - Raising $20M Everyone can invest anywhere in the world and advertise publicly with no financial requirements Must comply with Blue Sky laws in each US state where investors live No limit to how much main street investors can invest Tier 2: Raise between 0 and $75 million Everybody can invest, wherever they are there is public advertising without registration and audited financials are required Non-accredited investors have an annual limit of 10% of their income/net worth Benefits of Regulatory A+ Funding Campaigns Regulation A+ is a good alternative to Venture Capital because it maintains control over the future of the company. Having strong consumer traction and credibility will benefit companies that are marketing to thousands of investors through the Reg A+ process. The shares of Regulation A+ companies are considered liquid and can be sold by investors and insiders without restriction. Insider liquidity is discussed in this article. Early-stage companies and startups can also offer Reg A+ products.

What are the advantages of Reg D 506(c)?

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What are the advantages of Reg A+?

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What are the other capital sources available?

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How long does it take?

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Why do some raises fail?

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Why do some succeed?

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How is "investment Marketing" different from other types of marketing?

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