Reg A+ passes with the SEC

[Jillian Sidoti]

We are so excited about Reg A+  here. 

Great news for capital formation - this morning the SEC approved the rules for Reg A+, aka Title IV of the JOBS Act!

More detailed overview coming soon, but some quick details...

When: rules become effective in 60 days.

What: There are 2 "tiers"
Tier 1 - requires SEC and state blue sky reviews & fees, raise up to $20M per year, open to unaccredited investors, no audit required
Tier 2 - requires SEC review but no state blue-sky review ("preemption"), raise up to $50M per year, also open to unaccredited investors (limited to the greater of 10% of income or net worth), annual audit required, must use a registered transfer agent (FundAmerica will be helping to simplify this for issuers)
Both - are open to unaccredited investors, can be used by startups as well as existing businesses, and are exempt from 12(g) registration thresholds

How: Preprare offering doc's, get your audit done, use "form 8a short-form", submit draft offering to SEC, filing electronically via EDGAR

Compare to 506(c) - takes way more time to launch an offering, and far more costly in terms of legal fees, accounting costs, and annual reporting obligations. However, it enables you to sell to unaccredited investors and creates a tradable security.

Our firm has done Reg A's before - the blue skying is the WORST. So this is very refreshing to not have to blue sky the materials. It will make it so much easier for investors and entrepreneurs alike. Let me know if you have any questions! I am happy to answer them.