Media Library
Regulation A+ and the Use of ATS Systems
Regulation A+ has revolutionized capital raising, but did you know it also provides liquidity for investors?
One of the biggest advantages of Reg A+ securities is that they are freely tradable from day one! And now, issuers are turning to Alternative Trading Systems (ATS) to create a marketplace for secondary sales.
What You'll Learn in This Video: How Reg A+ unlocks capital raising without a full public offering,The role of Alternative Trading Systems (ATS) in providing liquidity, Why ATS platforms only activate after the primary offering, How price discovery and investor networks drive secondary sales, The future of private securities trading with high-tech transfer agents
Why wait for liquidity? Learn how to leverage ATS for Reg A+ today!
Interested in learning more about Reg A+ offerings & ATS integration. Contact us to explore your capital-raising options!
SEC Regulation A and Selling Shareholders - A Liquidity Option for Your Investors
Securities and Exchange Commission Regulation A exempt offerings have seen exponential growth in issuer use and the volume of capital raised year over year since the 2015 rule changes that created the Regulation A Tier 2 program.
A substantial number of corporate issuers are benefitting from the “public offering” investor acquisition capabilities of the program and are opting to execute under SEC Regulation A to maximize their capabilities for raising capital.
One significant benefit that SEC Regulation A has is the selling shareholder feature. Regulation A allows up to 30% of the offering amount to be securities sales from existing shareholders selling their personally held shares through the Regulation A offering and at the Regulation A offering price. This feature has been especially popular with asset funds as it allows an asset fund to offer a liquidity option for the fund's investors that does not require the selling of fund assets to leverage cash for a redemption of shares. Selling shareholders are listed in the SEC Form 1-A filing for disclosure.
In fact, the selling shareholder feature is so effective for asset funds that many of these funds that were going to operate with a fixed term are now able to operate in an "evergreen" model as liquidity is provided for through annual SEC Regulation A offerings being executed each year by the fund.
Ready to explore raising capital with your own SEC Regulation A Offering? 📍 Visit: redrocksecuritieslaw.com 📲 Call: (720) 586-8610
Regulation A Offerings - Series LLC and the Replicate Model
Regulation A is frequently used for issuers seeking to fractionalize ownership in assets.
As such, these issuers execute numerous offerings each year for new assets and two offering structures under Regulation A have stood out for creating efficiency in the preparation process: (a) Series LLC and (b) the “Replicate Model”.
Series LLC: Series LLC’s work well for issuers seeking to fractionalize ownership in assets as each new offering for a new asset is filed as a new Series LLC under the Master LLC and Master Form 1A and an amendment is made to the existing SEC qualified Regulation A filing. Since the asset is probably very similar to the prior asset for the prior series - the legal work to prepare and file is dramatically reduced from the original filing.
Replicate Model: The Replicate Model functions in a similar manner except each new asset executes under a new Regulation A offering qualified for that entity and a new entity is typically formed for each new asset. The difference here is instead of an amendment to an existing Regulation A Form 1A - there is a new Form 1A being submitted for qualification for a new non Series type entity. The efficiency is created in using a Form 1A for the prior similar asset for developing the new offering and SEC filing thus creating a shorter lead time for finalizing the filing and legal work.
Interested in learning more? Contact us today at (720) 586-8610!
Why a Direct Regulation CF Allows Control of Your Data
Regulation CF offerings have revolutionized investment opportunities by allowing issuers to reach the public directly.
But did you know there's a way to maintain full control over your investor data?
With the SEC’s 2021 update, issuers can now conduct Direct Regulation CF offerings through a FINRA broker-dealer—eliminating the need for third-party crowdfunding platforms. This means: You own and control your investor prospect data. This also means lower costs compared to traditional crowdfunding platforms and a streamlined, customized investment experience.
Many investors prefer working directly with issuers rather than through a platform that may resell or use their data for retargeting. A Direct Reg CF Offering ensures privacy, efficiency, and a more tailored fundraising process.
Bespoke investment portals Simplified investor onboarding More cost-effective than Regulation D 506(c) Interested in learning how to take control of your capital raise? Call us today! (720) 586-8610
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Intermediary Broker Dealers and a “Direct" Regulation CF Offering
Did you know you can raise capital under Regulation CF without using crowded, expensive crowdfunding platforms?
The key lies in executing a Direct Regulation CF Offering with a FINRA Broker-Dealer and a custom investment portal—giving you full control over your raise, data, and costs.
What You'll Learn in This Video: How a broker-dealer acts as your intermediary, The benefits of a custom Regulation CF investment portal, Lower fees (typically 3% commission, no equity required) vs. crowdfunding platforms, Increased investor trust & higher compliance standards, The full process of executing a Direct Regulation CF Offering
Start your capital raise the smarter way with Red Rock Securities Law & Investor Technology.
What is a “Direct” Regulation CF Offering?
What is a “Direct” Reg CF Offering and how is it different than a traditional Reg CF offering?
The original Reg CF rules required that all Reg CF offerings execute on an SEC approved Reg CF Platform. While many of these platforms materialized, they tend to be very expensive to utilize (8-11% commissions and 2-3% equity along with CF preparation and Form C preparation and filing fees). They also do not provide a custom experience for the issuer's investors or offering.
A “Direct” CF offering takes advantage of a rule change that allows approved broker dealer intermediaries to engage in administration of a Reg CF offering. This allows the issuer to bypass the expensive Reg CF platforms and execute “direct” using a FINRA broker dealer managed custom raise portal, built specifically to run the issuer's CF raise, with all needed back-end integrations for subscription processing and investor management. The issuer essentially gets a "mini" Regulation A+ offering in terms of the investor experience and investor acquisition potential without the extended preparation timeframe and cost of a Regulation A+ offering.
Another benefit of a “Direct” Reg CF Offering is execution fees and commissions that are 1/3 the cost of using a traditional Reg CF Platform while maintaining a fully SEC compliant sales process. Further, issuers will have their own dedicated CF website portal and are not sending their investor prospects to a traditional CF platform with hundreds of other competing investment opportunities.
Ready to explore your own Regulation CF strategy? 📍 Visit: redrocksecuritieslaw.com 📲 Call: (720) 586-8610
What is a "Stairstep" Regulation CF Offering Strategy?
"Direct" Regulation CF Offerings have exploded in popularity over the last two years.
The Securities and Exchange Commission's rule changes in March 2021 which increased the Regulation CF annual limit to $5,000,000 and created the ability for FINRA broker dealers to serve as intermediaries overhauled the CF program and created the ability to execute a "mini Reg A+" offering.
The ability to execute a Regulation CF offering using your own custom raise portal with minimal commissions and fees has changed the dynamic for companies raising funding. Regulation CF does require issuers to have audited financials for any offering over $1,235,000 in size. Are there ways to mitigate that expense?
Enter the "Stairstep" Regulation CF strategy. Quite simply - a "stair step" approach to executing under Regulation CF involves a first round at $1,235,000 (or less) which alleviates the need for the audited financials. This also allows the issuer to execute a first round and get some feedback on investor interest prior to launching a larger secondary. As the first round is executing, the issuer can then utilize proceeds from the offering to pay for the audit and once the audit is complete - the first round is closed, and we update the Regulation CF filing for a second round that goes above the $1,235,000 cap.
This strategy has the following advantages: it allows the issuer to gauge market interest it allows the company to execute and start raising initial funding without the need for the audited financials the second round is typically re-priced at a higher valuation funds from the first round can be used to pay for the audit the time to update between rounds is minimal
Interested in learning more? Contact us today at (720) 586-8610!
Regulation D: A Game Changer for Small Businesses
Regulation D has been a cornerstone of private investing since its introduction in the 1980s, allowing businesses to raise capital without the burden of full SEC registration.
But how does it work? And what are the latest updates you need to know?
In this video, we’ll discuss: The history of Regulation D and its impact on fundraising The key exemptions (Rule 504, 506b, 506c) and how they work The JOBS Act changes that reshaped private fundraising Recent updates and what they mean for startups & investors
Whether you're a business owner, investor, or just curious about how companies raise money without going public, this video is packed with valuable insights!
Is Regulation D 506(b) Still Relevant?
Is Regulation D 506(b) still a valuable tool for private capital raises?
With the rise of 506(c) general solicitation, many issuers wonder if the traditional private placement exemption still holds weight. The answer? Yes!
What You’ll Learn in This Video: The key differences between Reg D 506(b) and 506(c)Why 506(b) is ideal for "pre-syndicated" private investment roundsHow issuers use 506(b) for friends & family fundraisingThe benefits of allowing non-accredited investors in a private placementWhether 506(b) is still the right choice for your capital raise
Red Rock Securities Law can help in your Regulation D offerings and private investment strategies. Contact Us Today!
A Primary Benefit of Utilizing a Regulation D Offering
Regulation D Offerings are a great way to raise private capital for your business and they can provide a benefit that Regulation A and Regulation CF Offerings cannot.
A Regulation D Offering is a more streamlined preparation process as a Regulation D exempt offering does not require SEC qualification. A Private Placement Memorandum is drafted to provide proper disclosure to investors which will typically include pertinent exhibits such as governance documents, financials, formation documents, and a subscription agreement. Further, a Form D notice filing is sent to the SEC notifying them the issuer is executing an offering under Regulation D.
Ready to explore your own Regulation D strategy? 📍 Visit: redrocksecuritieslaw.com 📲 Call: (720) 586-8610