Yesterday, the SEC approved the final rules for the implementation of Title IV of the JOBS Act’s Regulation A+ which allows start-ups and emerging growth companies (EGC) to crowdfund a $50 million mini-IPO with the general public… not just raise funds from qualified (accredited) investors per Regulation D offerings.
Until yesterday, EGCs could only raise $5 million in a public offering via Regulation A (no “+”). Reg A also had other roadblocks including most states requiring their own individual Blue Sky Law adherence.
Regulation A+ has increased the raise to $50 million and removed the necessity for individual state compliance.
The “who” can invest is key. EGCs were locked to work with accredited investors – individuals who earn more than $200K per year or have a net worth over $1M. Regulation A+ allows anyone to invest 10 percent of their annual income or net worth – but no more. The SEC will be carefully monitoring for fraud and bad actors.
Certainly, this increase in cash will help companies work and earn their way to a “regular-sized” IPO. Vintage will be ready to help guide that journey.
No news on the SEC’s progress getting sharks with frikin’ laser beams attached to their heads.