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.

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