What's it cost to complete a Regulation A+ offering ?
As a top level view, expect that costs for a completed offering will be in the 10% of capital raised range, approximately, including all the different factors.
Fees that need to be paid before the first capital closing:
A) Legal cost for SEC filing of the Form 1-A. A reasonable estimate for the legal filing cost starts at $46k to $55k although it can cost far more if you use a large established law firm.
B) Audit cost varies by auditor and complexity of your business. Perhaps as low as $4k for a simple young company. Far more for a large audit firm for a complex company.
C) Marketing costs before the first closing. For a small offering as low as $30k and on up.
We work with and can introduce you to specialized firms for all aspects of completing your Regulation A+ offering
Total Marketing costs through to completion of the offering: You will need to spend at least $50k and up - think $250k (or more, approximately 2% to 4% of capital raised from retail investors is a good guide to use, the agencies do not charge a % fee, they charge for their creative work and the cost of advertising etc) on marketing using a carefully selected marketing agency to promote your offering widely in order to bring in enough investors to fund your offering. We usually introduce our companies to a specialized marketing agency (that covers all the aspects that are required) as a part of both verifying that they are confident they can bring in sufficient investors to raise capital for your particular offering and also to get a specific cost estimate.
(We recommend to many of our companies that they use a Broker-Dealer Syndicate to help complete the capital raise. They charge a fee of approx 7.5% on the capital they raise from their own clients and charge a smaller % fee on the retail investment capital raised through your efforts and the marketing agency that is working to promote your offering. They will also charge an up-front fee in the range of $20k and higher to engage their services).
The other costs involved are:
1) Manhattan Street Capital Fee which is $50 per deposit into escrow plus $50 of warrants (warrants are similar to stock options, they are not a cash cost).
2) The back end broker-dealer, transfer agent and Escrow fees which will be charged out of the capital when raised, and will likely amount to about 1% of capital raised.
3) SEC required due diligence fees may run up to $8k per company.
The above are estimates intended to help companies scope out the costs of conducting a Regulation A+ offering. The actual numbers will vary.
Companies can elect to use the Manhattan Street Capital Research Analyst Service (CrowdAnalyst(TM)) for a fee of $2k to $4k per month. This service starts when companies have completed their offering.