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Chapters:
- Features of Reg A+
- Using Alternative Trading Systems to Publicly Trade Your Stock
- Offering valuation Flexibility
- Marketing advantages
- Test Market Your Reg A+ Quickly At Low Cost
Disclaimer:
The content in this webinar is not and shall not be construed as investment advice. This information is meant to be informative and for general purposes only.
MSC is not a law firm, valuation service, underwriter, broker-dealer or Title III crowdfunding portal and we do not engage in any activities requiring any such registration. We do not provide advice on investments. MSC does not structure transactions. Do not interpret any advice from MSC staff as a replacement for advice from service providers in these professions.
Rod Turner
Rod Turner is the founder and CEO of Manhattan Street Capital, the #1 Growth Capital service for mature startups and mid-sized companies to raise capital using Regulation A+. Turner has played a key role in building successful companies including Symantec/Norton (SYMC), Ashton Tate, MicroPort, Knowledge Adventure, and more. He is an experienced investor who has built a Venture Capital business (Irvine Ventures) and has made angel and mezzanine investments in companies such as Bloom, Amyris (AMRS), Ask Jeeves, and eASIC.
www.ManhattanStreetCapital.com
Manhattan Street Capital, 5694 Mission Center Rd, Suite 602-468, San Diego, CA 92108.
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So, advantages of Reg A+, you can raise up two 75 million per 12 month period. So that's a sizable amount of money. You retain control of the company, unlike when you are raising money through private equity or venture capital funding. You provide liquidity through plus to your in insiders, the founders of the company, and to your long standing investors as well as to the new investors.
You can conduct various kinds of public offerings. A Reg A+ is a public offering, but you can list your company on the Nasdaq, on the N Y S E or on the OTC QB or the QX or on a new thing, which is called Alternative Trading System. And I'll explain more about those later, but that flexibility to list your company is good. And it's, if you list on, whilst, if you list on the NASDAQ or the N Y S E, you have a PCA o b order requirement once a quarter. If you list on the other exchanges I mentioned, your annual, your annual audit requirement just once a year is US Gap. So it's a much less onerous financial reporting obligation unless you list on the NASDAQ or on the N Ys e, you can already, public companies can conduct secondary offerings via Reg A+ if you choose to list on an alternative trading system.
There are no there's no shorting and there's no naked shorting allowed on those exchanges. So that's a huge advantage. It really means that companies that are not as prepared, not ready for the rigors of being public where naked shorting is allowed on the NASDAQ and the nyse. When I say naked shorting, I don't mean by regular investors, I mean by stock brokers. They're the ones that have the naked shorting ability. So on the OTC markets and on the NASDAQ and nyse that naked shorting, but risk decimate a lot of public companies. But on an alternative trading system, the ability to be liquid and yet not have the risk of a short sales is a big advantage. That's an advantage of Reg A+, you can change the valuation of your offering as, as most of you will know, in many instances, you can't really change the share price and evaluation of your capital raise part way through.
But in a Reg A+, you can. That's a nice thing. You could typically valid, credible companies that are succeeding, raising money in Reg A+ usually will carry a higher valuation. And they would have, if they had raised, if they had raised money from venture capital or Angel investment sources. So much less dilution is a big advantage. And a couple more advantages because we are marketing these offerings online to Main Street investors and because main, it turns out Main Street investors, many of them are optimists and they're investing largely on their smartphones. It's a lot less, it's a lot different dynamic. It's a lot more friendly dynamic as long as we are marketing offerings that appeal to the Main Street investor, and I'll get into that later. So the ability to raise money from a less skeptical audience and to do so easily with being convenient for them and providing democratic access to capital for them is a, is a serious advantage of Regulation A+ because in many instances, they haven't had these chances to, to engage and get involved with companies that they love.
We, we've been doing Reg A+ offerings as an industry since 2015. And during covid, one of the advantages, one of the few advantages of Covid was that people got stuck at home and I had to do other stuff than usual, and they paid attention to online investing. And this online investing category came of age as a result. So we've seen rapid growth in capital formation in the Regulate plus space and institutional investors and accredited investors are paying much more attention depending on the nature of the offering. I'll get into that more later also. So this is essentially, Reg A+ is essentially a simpler, less expensive form of public offering with a lot of flexibility built in.
A lot of companies are, it's, it's easy. It's, it's straightforward to include a transfer agent. Thanks. It's, it's straightforward to include a transfer agent in Reg A+ offerings, which lightens the burden on the company of dealing with so many investors, and I can talk about that later if necessary. But the utilization of a transfer agent makes it convenient to have thousands of investors or hundreds or whatever it might be. And using broker dealers or even underwriters is optional. I'll get into that more later also. And there's a thing called test the waters in Reg A+ where companies are allowed to test market themselves to investors without raising money. So you don't have to do an audit, you don't have to file with the S E C, you do have to conduct the test appropriately, but you are allowed to test market your company to investors to see if it's cost effective to reach them.
And if so, you can. And, and you can also test different messages and different advertising methods to find out which description of your company resonates the best with, with investors. So we offer that as a service. But the point isn't that, the point is that it's nice to be able to test your offering first if you want to do that, if you wanna reduce the risk of it falling on deaf ears. And the s e has expanded that test Water's option to other kinds of offerings as well, since it's been used so successfully in Reg A+.
THIS TEXT TRANSCRIPT HAS ERRORS IN IT THAT WERE CAUSED BY THE SPEECH TO TEXT CONVERSION SOFTWARE WE USED. DO NOT DEPEND ON THE TEXT TO BE ACCURATE. WATCH THE RELEVANT PARTS OF THE VIDEO TO MAKE SURE YOU ARE PROPERLY INFORMED. DO NOT DEPEND ON THIS TEXT TRANSCRIPTION TO BE ACCURATE OR REFLECTIVE OF THE STATEMENTS OR INTENT OF THE PRESENTERS.