TIPS FOR SUCCESS
Tip of the Month: Understanding the Timeline of aRegulation A+ Offering
How Long Does a Regulation A+ Offering Take?
Launching a Regulation A+ offering can be a great way to raise capital, but it’s important to plan for the time it takes to navigate the process. Here’s an overview of the key phases and typical timeframes involved:
1. Pre-Offering Preparation (2-6 months)
This phase is crucial and can take several months depending on how ready your company is. Here are the steps:
- Corporate Readiness: Ensure your financial statements are in order. Tier 2 offerings require audited financials, which may take time if you haven’t undergone an audit recently.
- Legal Review and Documentation: Work with securities lawyers to draft your offering circular and other necessary documents, including business plans, disclosures, and risk factors.
- Testing the Waters: If you choose to test the waters, this period allows you to gauge investor interest before filing with the SEC. Testing the waters can influence how quickly you move forward, depending on feedback.
2. SEC Qualification (2-4 months)
Once your offering circular is prepared, you submit it to the Securities and Exchange Commission (SEC) for review. This process includes:
- Initial Filing (Form 1-A): You file the offering circular, and the SEC begins its review. This review can take 60 to 90 days, depending on the complexity of your offering and the SEC’s workload.
- SEC Comments: The SEC will likely issue comments, requesting clarifications or additional information. You will need to revise and resubmit your filing until the SEC is satisfied. The back-and-forth process can add time but is necessary to ensure compliance.
- Qualification by SEC: Once the SEC qualifies your offering, you are legally allowed to begin selling securities. This step typically takes 2-4 months but could take longer for complex offerings.
3. Marketing and Fundraising (6-12 months)
After SEC qualification, you can start raising funds:
- Marketing Your Offering: During this period, you’ll engage in outreach to investors through online platforms, advertising, and other channels. The success of this stage depends on your marketing strategy and investor interest.
- Investor Closing Process: Investors need time to review your offering, and depending on market conditions, raising the full target amount could take several months.
- Meeting the Minimum Raise: If you have a minimum raise, you’ll need to hit that amount before accessing funds, which could add time depending on investor response.
4. Post-Offering Requirements (Ongoing)
After the fundraising process:
- Compliance and Reporting: If you’re doing a Tier 2 offering, you’ll need to meet ongoing reporting requirements. This includes filing semi-annual and annual reports with the SEC. These obligations continue as long as your securities are outstanding, which could be years after the initial raise.
Practical Insights:
- Planning for Delays: Regulatory reviews, investor engagement, and market dynamics can introduce delays. It's a good idea to buffer extra time into your overall timeline.
- Phased Approach: Consider breaking your raise into phases to manage investor expectations and align capital with business milestones.
Typical Overall Timeline:
- A complete Regulation A+ offering can take 6 to 12 months from start to finish, depending on how quickly each phase moves. Companies that are well-prepared and have a streamlined strategy may complete the process on the shorter end of this range, while more complex offerings or those requiring significant adjustments may take longer.
Understanding the typical timeline helps you better prepare for each phase, ensuring you have the resources and patience to navigate the entire process successfully.
CURRENT EVENTS
Meet Sean Levine at Two Upcoming Conferences in September!
We are excited to announce that Sean Levine, Entoro's Managing Director, will be attending two prominent conferences this September. This is a great opportunity to connect, gain insights, and explore new possibilities in the financial space.
- North Capital Conference
Date: Wednesday, September 18th 9:00am - 5:00pm
Location: Salt Lake City, UT
Join Sean and the North Capital team for a day packed with educational panels, coordinated networking opportunities, and the chance to mingle with industry professionals. This one-day event is not to be missed! - Jets and Capital Conference
Date: Friday, September 20
Location: Utah
This exciting conference will bring together key players in the investment and capital sectors. Don't miss your chance to connect with industry leaders.
If you would like to schedule a meeting with Sean during either of these conferences, please reach out via email at slevine@entoro.com
ENTORO INSIGHTS
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Under the agreement, both Entoro Capital and Archax will facilitate projects and collaborations that lead to significant financial transactions and investment opportunities, for the benefit of their respective clients. This alliance is designed to capitalize on each firm’s expertise and market presence, thereby expanding their market reach. Key areas of focus include leveraging the parties’ leadership in the areas of Tokenisation, Digital Real-World Assets (RWAs) and Securities, and Voluntary Carbon. Archax will also work closely with Capturiant, an Entoro affiliate, the leading engineered solutions environmental asset authenticator, registry, and exchange, by acting as custodian and strategic partner within the United Kingdom.
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MARKET YOUR OFFERING
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FEATURED ARTICLE
The Power of Marketing in Regulation A Offerings: ABroker-Dealer’s Perspective
Regulation A (Reg A) has transformed the landscape for companies seeking to raise capital. With the potential to raise up to $75 million annually, Reg A offers a unique opportunity for businesses to engage with a broader range of investors, including non-accredited investors. However, one critical element that can make or break a Reg A offering is marketing. In this article, we delve into how broker-dealers market these offerings and the importance of effective marketing in building brand awareness and attracting investors.
The Role of Broker-Dealers in Reg A Offerings
Broker-dealers play a crucial role in the success of a Reg A offering. These professionals act as intermediaries between the issuing company and potential investors, ensuring that the offering complies with regulatory requirements and reaches the right audience. One of their primary responsibilities is to develop and execute a marketing strategy that resonates with potential investors.
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REG A+ FAQs
How to market your Regulation A + company offering
One of the great things about the Reg A+ system is that you are allowed to market your company widely. It's the opposite of the traditional IPO "Quiet Period". This means that you are allowed (and you won't succeed if you don't do this) to market your company and gather non-binding reservations before SEC Qualification of your Offering. After SEC Qualification, you can actively market to actual investors through all methods to generate investments. Of course, doing this requires a dedicated and effective marketing program that covers all the bases - 360 degree marketing. That means testing marketing messages, the creation of a beautiful and clearly written offering that appeals to your audience, a compelling and short video, PR, advertising, social media, influencer marketing and more.
Project management and the coordinated combination of all the moving parts is a significant skill that most agencies don't need but that is essential in crowd investor marketing. We work with some very talented marketing agencies that specialize in the kind of marketing that is needed. We will introduce you to them.
When marketing my Reg A+ Offering what words or phrases should I avoid using?
There are some words you must not use in Regulation A+ marketing. Get more guidance from your attorney
TestingTheWaters(TM) Marketing Bad Words/Sounds/Images Dictionary
This guidance applies to all marketing materials, whether used in TTW or post-qualification marketing.
“Approve”: The SEC doesn’t approve Regulation A offerings, it reviews them and then qualifies them. The SEC requires the Offering Circular to bear a legend which specifically states that the SEC isn’t approving or passing on the merits of the securities offered. Avoid any wording that implies the SEC has approved, signed off on, given the green light, or anything that even hints of approbation or any degree of merit.
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See why so many Issuers trust us to facilitate asuccessful offering.
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
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