Regulation A securities offerings (both Tier I and Tier II exemptions) may, under the new SEC regulations, be used on an integrated basis to raise up to $75 million in capital for businesses and commercial real estate projects.

The rule change provides important enhancements that fundamentally change the probability of a successful funding in line with the odds of a successful IPO (1 in 1.47 vs. 1 in 1.35, respectively). These odds beat bank financing (1 in 5.55) by a wide margin.

Multiple Funding Pathway Benefits

The Regulation A exemption – as originally enacted in 2012 – allowed for “testing the waters” advertising once the offering registration was filed with the SEC. The problem was there was no way of knowing how long the SEC would take to review the submittal, thus testing the waters advertising was a potential risk not worth taking.

Timing Now Optimized For Regulation A Financings

The changes enacted in November 2020 now provide a pathway forward for potentially raising huge sums of capital by allowing issuers to conduct pre-offering solicitations before the offering is even filed with the SEC. These solicitations include both virtual “shark tank” investor presentations that can be done virtually (as in being a “Demo Day Event” in the INVIZEN Deal Room) to pre-work the potential market and build a base of prospective investors, as well as being able to do broad solicitations on the basis of the initial business plan outside of a Demo Day Event.

Impact Focused Promotion in Advance of Offering Election…

In both cases, the opportunity for the issuer comes in multiple forms: (1) an accredited investment entity may make a bona fide offer to provide financing before the offering is even launched; and/or (2) the issuer has the opportunity to build interest in the upcoming offering; and (3) these efforts can be integrated into an overall campaign approach that works essentially similar to that of an IPO (thus maximizing the odds of a successful outcome).

Overview of Accelerator Program Key Points