OFFERING TIPS
As we navigate the intricacies of Regulation A+ offerings, it's crucial to shift our focus this month to a pivotal aspect of capital raising that extends far beyond the initial offering – Investor Relations. Building and maintaining strong relationships with your investors is not just a post-offering necessity; it's an ongoing commitment that can profoundly impact the success and growth of your company.
The Importance of Investor Relations in Regulation A+:
Investor relations encompass the strategies and practices employed by a company to communicate with its investors. In the context of Regulation A+, where accessibility to a broad investor base is a unique advantage, effective investor relations become a cornerstone for long-term success.
Key Elements of Investor Relations for Regulation A+ Companies:
Transparent Communication: Open, honest, and timely communication is fundamental. Keep your investors informed about company developments, financial performance, and any relevant changes. Regular updates, whether through newsletters, webinars, or direct correspondence, instill confidence and trust.
Accessibility and Responsiveness: Make it easy for investors to reach out with questions or concerns. A responsive and accessible investor relations team fosters a positive investor experience. Address inquiries promptly and thoroughly, demonstrating your commitment to investor satisfaction.
Educational Initiatives: Many investors participating in Regulation A+ offerings may be new to this form of investment. Develop educational materials, webinars, or FAQs to help them understand the investment process, the regulatory landscape, and the unique aspects of Regulation A+.
Shareholder Meetings: Consider hosting virtual shareholder meetings to facilitate direct communication. These meetings provide a platform for investors to engage with company leadership, ask questions, and gain deeper insights into the company's strategy and future plans.
Long-Term Benefits of Effective Investor Relations:
Enhanced Investor Confidence: A well-managed investor relations program builds confidence among current investors and attracts potential investors. Trust is a valuable currency in the world of finance, and transparent, responsive communication is the foundation of trust.
Secondary Offerings and Future Capital Raises: For companies considering subsequent Regulation A+ offerings or other capital-raising initiatives, a positive investor relations track record can significantly impact investor willingness to participate in future offerings.
Brand Advocacy: Satisfied investors can become powerful advocates for your brand. Their positive experiences and endorsements can influence others, contributing to a positive perception of your company in the investment community.
Market Intelligence: Engaged investors often provide valuable feedback and insights. Use this information to refine your business strategy, enhance your products or services, and stay attuned to market trends.
In the coming months, we'll continue to explore essential elements of successful Regulation A+ campaigns. If you have specific topics or questions you'd like us to address, please reach out. Your feedback guides our content, and we appreciate your continued engagement.
FEATURED ARTICLE
Exploring Regulation A: Gateway for Capital Raising
Regulation A, known as Reg A, is an SEC exemption for public securities offerings, established by the Securities Act of 1933. It allows companies to raise capital with less stringent requirements than typical SEC registrations. This article delves into the essential aspects of Reg A, including its tiers, requirements, and advantages.
The Mechanics of Reg A
Reg A enables companies to fundraise through public offerings while bypassing the rigorous SEC registration process. To qualify, companies must file an offering statement with the SEC, akin to a prospectus in registered offerings, which provides critical investor information and functions as a disclosure document.
Tiers of Reg A
Reg A comprises two tiers, each with distinct regulations:
Tier 1: Permits raising up to $20 million in 12 months, with no ongoing reporting obligations, but necessitates a final offering report and state regulator qualification in each state where securities are sold.
REG A+ PREFERRED VENDOR HIGHLIGHT
1Transfer
1transfer is a financial technology transfer agent that specializes in providing end-to-end solutions for issuers with the management of securities on the blockchain. 1transfer's platform leverages both the blockchain and smart contracts to automate many of the processes involved in issuing, managing, and trading securities. The platform also provides tools for compliance with regulatory requirements, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. Overall, 1transfer aims to revolutionize the securities industry by making it more efficient, transparent, and accessible to a global investors. By leveraging blockchain technology, the company helps to create a new paradigm for how securities are issued, managed, and traded in the digital age.
REG A+ FAQs
How to market your Regulation A + company offering
One of the great things about the Reg A+ system is that you are allowed to market your company widely. It's the opposite of the traditional IPO "Quiet Period". This means that you are allowed (and you won't succeed if you don't do this) to market your company and gather non-binding reservations before SEC Qualification of your Offering. After SEC Qualification, you can actively market to actual investors through all methods to generate investments. Of course, doing this requires a dedicated and effective marketing program that covers all the bases - 360 degree marketing.
That means testing marketing messages, the creation of a beautiful and clearly written offering that appeals to your audience, a compelling and short video, PR, advertising, social media, influencer marketing and more. Project management and the coordinated combination of all the moving parts is a significant skill that most agencies don't need but that is essential in crowd investor marketing. We work with some very talented marketing agencies that specialize in the kind of marketing that is needed. We will introduce you to them.
What kind of funding is not allowed under Reg A+?
Reg A+ does not allow funding for the following:
• Companies with headquarters outside the U.S. or Canada. It is fine to move or set up the legal headquarters in the US or Canada for international businesses.
• Investment companies as defined by the Investment Company Act of 1940. Pure venture capital firms cannot use Reg A+. VC firms that are Debt based (minimum of 60% debt holdings) are allowed to use Reg A+ in specific circumstances - ask us and your securities attorney.
• Public companies. Reporting and non-reporting public companies are allowed to use Regulation A+.
• Development stage companies with no business plan or purpose.
• Companies issuing fractional, undivided interests in oil, gas, or mineral rights.
• Companies disqualified under the “bad actor” rules.
That’s it. If your company doesn’t fall into one of those exclusions, you’re eligible.
WATCH NOW
See why so many Issuers trust us to facilitate a successful offering.
CONSIDERING A REG A+ OFFERING?
Entoro Capital is a FINRA-registered Broker-Dealer in all 50 states, Puerto Rico, and the District of Columbia. The top choice for a Reg A+ broker-dealer and will answer all your questions. We support Issuers through the entire Reg A+ process from pre-filing preparation, to SEC review, marketing selection, and completion of the offering. Call Entoro today and let our team show you how to Reg A+ the right way.
ENTORO REG A+ CONTACTS
Morgan Sills
Director – Investment Banking
Entoro Capital, LLC
D: +1 832.987.4051
E: msills@entoro.com
Sean Levine
Managing Director
Entoro Capital, LLC
M: +1 917.715.1489
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