New Reg A + Equity Crowdfunding for Entrepreneurs The SEC has just released the new Regulation A – called Reg A+ for a “mini-IPO.” You will find that Reg A is a very useful addition to the Crowdfunding rules.
Reg A allows you to raise up to $20 million without audited financial statements (Tier 1), or up to $50 million with audited financial statements (Tier 2).
With Tier 2, you are not limited by state merit review rules. You can even sell a substantial amount of stock for existing stockholders to free up equity for yourself and your early investors.
New, unknown and promotional companies can “Test the Waters” with advertising. Testing the waters allows you to see if the offering will succeed before incurring all the expenses of an offering. Advertising is allowed if you inform people where to get the offering and tell them you cannot accept money until the SEC “qualifies” the offering.
These innovations make the new Reg A+ a powerful crowdfunding tool for entrepreneurs with fast growing companies.
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John E. Lux was in the top 5% of authors on Slideshare in 2014 and has been quoted by Bloomberg as an expert on reverse mergers This is part of a series on Regulation A, so be sure to subscribe here and to learn more, go to www. TheSecuritiesAttorneys.com
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