Regulation A has become very popular with issuers seeking to fractionalize ownership in various types of assets (art, collectibles, classic cars, etc.).  The ability to generally solicit the public and accept investment from all investors provides a very sophisticated and capable vehicle for raising capital.

The two primary structures we see deployed for these deals are as follows:

Series LLC:  The issuer forms a Series LLC and files a Regulation A offering for that entity.  As new assets are ready for investment the issuer creates a new series under the master LLC and an amendment is made to add that series to the original Regulation A filing.  Each asset offering is made through a new series and is thus segregated from the other asset offerings but with the efficiency advantages of making an amendment to the original Regulation A Form 1A filing instead of filing an entirely new Form 1A.  

“Replicate” Model:  The other structure we frequently see deployed is the “replicate” model.  In this structure each new asset has a new LLC formed and is filed as a new Regulation A offering with a new Form 1A submitted for qualification.  The efficiency advantage is gained via the issuer using a Form 1A that was completed for a prior similar asset and thus the issuer has very little modifications to that original filing.  This model still retains efficiency benefits as the main disclosure changing in the new Form 1A is the asset description.    

Both the Series and Replicate models have efficiency advantages for issuers seeking to fractionalize ownership in assets. Issuers interested in deploying a Regulation A offering should seek qualified legal advice on these matters.

Interested in learning more about Regulation A offerings?  Call us today to discuss: (720) 586-8610