SPECIAL ANNOUNCEMENT
Thank you to everyone who attended our Reg A+/CF Workshop at Entoro! Your engagement and insights contributed immensely to the success of our event. We want to give a big shoutout to our amazing speakers Richard Delgado, William Eilers, Nikki Gilbreth, Jason Fishman, Manuj Grover, Brian Mitchell, and Gary Ross.
We are grateful for the opportunity to connect with such a knowledgeable group of professionals and discuss the future of crowdfunding. Looking forward to further collaborations and continuing the conversations we started.
TIPS FOR SUCCESS
In this edition of our newsletter, we’re excited to share another valuable tip for companies considering a Regulation A+ offering: meticulously preparing your financials and pitch materials. Ensuring that your company’s financials are in order and creating compelling marketing materials can significantly enhance the credibility of your offering. Here’s how you can achieve this:
Understanding Financial Preparation and Marketing Materials:
Accurate and transparent financials are essential to meet regulatory requirements and build investor confidence. Additionally, well-crafted marketing documents are crucial for effectively communicating the value proposition of your offering to potential investors.
Tip: Prepare Your Financials and Pitch Materials Thoroughly
- Review Financial Statements: Ensure your financial statements are up-to-date, accurate, and comply with generally accepted accounting principles (GAAP). This includes income statements, balance sheets, cash flow statements, and shareholders’ equity statements. Consider hiring a reputable accounting firm to audit your financials if necessary.
- Prepare Detailed Offering Documents: Develop clear and comprehensive offering documents. These documents should provide detailed information about your company, the terms of the offering, risk factors, and financial projections. Transparency and clarity in these documents are crucial for gaining investor trust as well as passing regulatory hurdles.
- Create Compelling Pitch Decks: Design a professional and engaging pitch deck that highlights the key aspects of your offering. This should include an overview of your business, market opportunity, growth strategy, competitive advantage, and financial performance. Use visuals and concise messaging to make your pitch deck easy to understand and compelling.
- Develop Informative Marketing Materials: Prepare additional marketing materials such as brochures, one-pagers, and FAQs that provide potential investors with essential information about your offering. These materials should be visually appealing and easy to digest, reinforcing the key messages from your pitch deck.
- Engage Professional Advisors: Work with experienced legal, financial, and business advisors to guide you through the preparation of your financials and pitch materials. Their expertise can help ensure that your offering is compliant with SEC regulations and is presented in the best possible light.
- Practice Your Pitch: Conduct practice sessions for your pitch presentation. This can involve internal reviews or presenting to a small group of trusted advisors and stakeholders. Practicing your pitch helps refine your delivery, address potential questions, and build confidence.
Conclusion:
Diligently preparing your financials and marketing documents are critical steps in the success of your Regulation A+ offering. By ensuring your financial statements are accurate, preparing detailed offering documents, creating compelling pitch decks, developing informative marketing materials, engaging professional advisors, and practicing your pitch, you can enhance the credibility of your offering and attract the right investors. These efforts will contribute to a successful and compliant Regulation A+ offering.
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REG A+ FAQs
How does Regulation A+ provide liquidity to investors and founders and long term investors?
For the investor, the degree of actual liquidity depends on the Issuer company's Reg A+ offering. If they list on the NASDAQ or NYSE then liquidity can be excellent. If they list on the OTCQB or the OTCQX, then the liquidity can be good to very good.
When an Issuer company does not list on the above exchanges, then liquidity is limited to the specialized Reg A+ aftermarket exchanges, and broker-dealers that support Reg A+ share trading in the aftermarket. These exchanges are small and offer limited liquidity at present; they are growing to fill the need.
The Issuer company may choose to offer direct liquidity to their investors by defining what valuation method they will use and what other restrictions will apply in their Offering Circular. This type of liquidity is regulated.
The company's Affiliates will need to resell their Reg A+ shares in reliance on Rule 144 if they want to sell publicly. There's no holding period imposed, but there are limitations on the number of shares they can sell at any one time, they'll need to sell through a broker or market maker, they'll have to file a Form 144 with the SEC and "adequate current public information" must be available about the company, which means it must be compliant with Regulation A's ongoing reporting requirements.
What is the difference between Tier 1 and Tier 2 Reg A+ offerings?
Regulation A+ allows for two kinds of offerings, Tier 1 and Tier 2.
Tier 2 allows companies to raise $75 million per year from individual investors, accredited investors, and institutions worldwide. Most companies choose Tier 2 because the Tier 1 requirement to obtain State by State Blue Sky exemption is very slow and very expensive. Companies using Tier 2 do not need to satisfy state Blue Sky requirements to raise capital (with some exceptions).
How Tier 2 is more challenging than Tier 1:
The required upfront audit - (US-GAAP level) goes back up to two years, and the audit is for the period since the company was started for new startups. The many Tier States require 1 offering company to provide audited financials, so this one is often moot. The reporting requirements after the offering put some CEOs off. Management financial statements are required 6-monthly and an annual US-GAAP audit. Tier 1 permits capital raises of up to $20 million per year from individual investors, and of course, from accredited investors and institutions worldwide.
WATCH NOW
See why so many Issuers trust us to facilitate a successful offering.
Watch Video
CONSIDERING A REG A+ OFFERING?
Entoro Capital is a FINRA-registered Broker-Dealer in all 50 states, Puerto Rico, and the District of Columbia. The top choice for a Reg A+ broker-dealer and will answer all your questions. We support Issuers through the entire Reg A+ process from pre-filing preparation, to SEC review, marketing selection, and completion of the offering. Call Entoro today and let our team show you how to Reg A+ the right way.
ENTORO REG A+ CONTACTS
Sean Levine Abdissa Gemechu
Managing Director Director
Entoro Capital, LLC Entoro Capital, LLC
D: +1 917.715.1489 O: +1 713.823.2900
E: slevine@entoro.com E: agemechu@entoro.com
Entoro Disclosure: The information contained herein is not intended as a recommendation and does not constitute an offer to sell or a solicitation of an offer to buy securities. The information contained is for informational purposes only and should not be used as a basis for an investment decision. Entoro offers a variety of brokerage and advisory services and additional information can be found in our client relationship summary (form CRS). Investing involves risk, and there is the possibility of losing some or all your money when investing in securities and related instruments. Investment in Private Securities is highly speculative and illiquid, and investment decisions should only be made if you are able to sustain the loss of the entire investment and if you have no need for liquidity, as you should not assume you will have the ability to resell private securities. Private placement securities are generally only available for sale to accredited investors, as defined in the Securities Act of 1933. Investors should refer to the offering documents for detailed risk factors and considerations associated with private placement investments. Private placements securities have not been registered under the Securities Act, or applicable state securities laws, and are sold in reliance on exemptions from registration under the Securities Act and are therefore not required to comply with specific disclosure requirements that apply to securities registered under the Securities Act, amongst other differences. The Investment products described herein may not be offered for sale in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful or prohibited by the specific offering documentation. Entoro Capital, LLC, is the parent company of OfferBoard, LLC and Entoro Securities, LLC. Entoro Securities, LLC, is registered with the Securities and Exchange Commission (SEC) as a Broker-Dealer and is a member of FINRA and SIPC. Entoro Wealth is registered with the Securities and Exchange Commission (SEC) as a registered investment advisor. Securities offered through Entoro Securities LLC, Member FINRNSIPC. Not FDIC insured, not bank guaranteed, and may lose value.
Complete disclosures can be found at: https://www.entoro.com/disclosures
Entoro Securities Client Relationship Summary (form CRS): https://docsend.com/view/33d5u4kpatp6x92g
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