Today is an exciting day for companies that need to raise capital because Reg A+ finally goes into effect.
Reg A+ is the nickname for SEC Regulation A, as amended by the SEC. Reg A has been around for many years but was rarely used because it was available only to very small financings, had too many limitations and was costly.
As part of the Jumpstart Our Business Startups (JOBS) Act, enacted in 2012, the SEC was instructed to update Reg A to make it more useful as a capital-raising tool. Reg A+ is the result.
The main benefits of Reg A+ include:
- Companies can raise up to $50 million every 12 months.
- Insiders can sell their shares in a Reg A+ offering.
- Investors in a Reg A+ offering have immediate liquidity – they can sell their shares once the offering is completed and don’t have to hold them for a period of time.
- Some Reg A+ offerings are exempt from state securities or “blue sky” laws.
- Some Reg A+ offerings are easier to list on an exchange.
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We think Reg A+ provides a great opportunity to raise capital and can be looked at as an alternative to either a private placement or an IPO.
But don’t take our word for it. Here is what others are saying about Reg A+: Small firms aim to raise capital more easily under new rule (The Wall Street Journal, 6/17/15)
If you have any questions about Reg A+, please feel free to reach out to any of the attorneys in Gunster’s securities and corporate governance practice.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
About Gunster
Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 13 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Naples, Orlando, Palm Beach, Stuart, Tallahassee, Tampa Bayshore, Tampa Downtown, Vero Beach, and its headquarters in West Palm Beach. With more than 280 attorneys and consultants, and over 290 committed professional staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.
