Two Upcoming Events

I’m delighted to participate in two important Crowdfunding events over the next few weeks:

The Regulation A Bootcamp in Manhattan this Thursday, November 10th. For more information and to register, click here.

The CrowdInvest Summit in Los Angeles on December 7th. For more information and to register, click here. (Use prom code “MARK30” for 30% off your conference pass).

Both these events are going to be terrific, with a roster that reads like a who’s-who in the industry.

(Miss Nevada had planned to attend also, but apparently had a last-minute scheduling conflict when she learned I would be participating.)

I look forward to seeing everyone else there!

MARK

The New And Improved Regulation A: A Short Summary

On October 16th, I’m going to be talking about Regulation A at the 5th Annual Global Crowdfunding Convention in Las Vegas, with Miss Nevada as my co-presenter (of course). I prepared this summary-of-a-summary for the event. For more in-depth information, here’s my Regulation A+ Primer. – MARK

The JOBS Act created three flavors of Crowdfunding:

Title II Crowdfunding, which allows issuers to raise an unlimited amount of money from an unlimited number of investors using unlimited advertising – but is limited to accredited investors.
Title III Crowdfunding, which allows issuers to raise up to $1 million per year from anyone, including non-accredited investors.
Title IV Crowdfunding, which modified the old Regulation A and is sometimes referred to as Regulation A+.

Quick Summary of Regulation A

Raise up to $50 million per year for each issuer
Raise money from both accredited and non-accredited investors
Register with the SEC
Takes about five months, start to finish
No State-level registration
Shares freely tradeable from day one
Sales by existing shareholders
Regulation A shareholders not counted toward Exchange Act limits for full reporting
Mini-IPO, but with much lower cost

Two Tiers

Theoretically, there are two “tiers” under Regulation A:

	Tier One	Tier Two
Amount Per Year	$20 million	$50 million
Non-Accredited Allowed	Yes	Yes
Limits on Investment	None	For non-accrediteds, 10% of income or net worth, whichever is greater, per offering.
Audited Financials	No	Yes
Registration with SEC	Yes	Yes
Registration with State	Yes	No
Excluded from Exchange Act Limits	Yes	Yes
Shares Freely Tradeable	Yes	Yes
Post-Offering Reporting	No	Yes
Testing the Waters	Yes	Yes
Online Distribution Allowed	Yes	Yes
Bad Actor Limits	Yes	Yes

Because of the exemption from State registration, most companies will choose Tier Two.

Companies That Cannot Use Regulation A

Investment Companies	Companies that own stock or other securities in other companies.
Foreign Companies	Issuers must be organized and have their principal place of business in the U.S. or Canada.
Oil and Gas Companies	Can’t sell fractional undivided interests in oil and gas rights, or a similar interest in other mineral rights.
Public Companies	Can’t be a publicly-reporting company.
Companies Selling Asset-Backed Securities	For example, interests in a pool of credit card debt.

Where Regulation A Makes the Most Sense

Additional Resources

Questions? Let me know.