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Summarize Title IV Regulation A+ for me

Summary of Regulation A+ Title IV

Traditionally, investing in startups and other growth-stage companies has been the privilege of the wealthiest Americans. Accredited investors (people making $200,000 or more for two most recent years, or with a net worth of $1 million) were the only ones allowed by the Securities Exchange Commission to invest in startups. Investing is starting to see greater democratization, however.

In 2012, President Obama signed the American JOBS Act into law, which had 10 provisions to improve the working outlook and overall financial opportunities for Americans. Title IV of the JOBS Act, also referred to as Regulation A+, allows companies that want to raise between $3 million and $75 million* to do so from anyone – regardless of assets and income levels.

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What is Regulation A+?

Regulation A+ (or “Reg A+”) is a new way to raise capital created by the Securities Exchange Commission (SEC). Effective March 25, 2015, SEC rules allow companies to test the attractiveness of their company offering to the investor market. This is the RegA+Audition(TM) on Manhattan Street Capital.

Since June 25, 2015, companies have been allowed to apply to make a Regulation A+ offering with the SEC and, when ready, raise capital in our platform and others. We are the first Regulation A+ platform. Manhattan Street Capital and FundAthena, a division of Manhattan Street Capital, will only fundraise for companies that we have reviewed and approved to list their offering on the "Company Offerings" Page.

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What is a Regulation D offering?

According to the Securities Act of 1933, every company has to register their offering with the SEC in order to sell their shares. There are situations where the exemptions allow the companies to sell their shares without a SEC registration. One such exemption is Regulation D or Reg D.

Reg D provides three exemptions from the registration, Rule 504, Rule 505 and Rule 506.For purposes of online equity crowdfunding, Rule 506 is most significant, and it splits into two different variations, 506B and 506C. In each case, only accredited investors are allowed to invest.

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What is Reg S or Regulation S?

Regulation S provides an SEC-compliant way for non-US and U.S. companies to raise capital outside the U.S.

A Regulation S offering can issue equity or debt securities. A company that makes its offering under Reg S can also use another method to raise capital inside the U.S. - usually Reg D or Rule 144A.

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Can I list my company's Reg D, Reg A+ or Rule 144A securities on an Alternative Trading System - ATS ?

ATS stands for Alternative Trading System. Regulatory change in recent years has brought the ATS type of securities exchange into existence.

An ATS is an after-market exchange where people who own securities can buy and sell.

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What is the difference between Tier 1 and Tier 2 Reg A+ offerings?

Regulation A+ allows for two kinds of offerings, Tier 1, which spans from zero to $20 mill, and Tier 2 that spans from zero to $75 mill.   

Tier 2 allows companies to raise from zero to $75 million per year from individual "Main Street" investors and accredited investors and institutions worldwide. The majority of companies choose Tier 2 because the Tier 1 requirement to get 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). Note that Tier 2 starts from a zero minimum for SEC purposes - I say this because there is a popular misconception that Tier 2 starts at $20 mill. That is not the case! Many companies make successful Tier 2 offerings of less than $20 mill. 

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What is the difference between a Mainstreet Investor and an Accredited Investor?

Regulation A+ allows any investor, worldwide, to invest in private companies. This is a major change in US securities law, and it means that anyone can invest, if they choose to do so, in a Reg A+ offering, after it has been Qualified by the SEC. Before Reg A+ became effective in 2015, only wealthy, Accredited investors were allowed to invest in private companies. 

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How can investors trade my company's shares on the Tzero ATS?

Investors can sign up directly with Tzero and open an account, and they can trade on Tzero from the following broker-dealers.

  • Piper Sandler
  • DA Davidson
  • ChoiceTrade
  • Ustocktrade Securities
  • ChoiceTrade
  • ApexPro (formerly ETC)
  • Cuttone & Company
  • Clear Street
  • Regal Securities

This list is specific to the Tzero ATS.

 

Related content:

 Reg A+ liquidity explained for insiders and investors

How To IPO To The NASDAQ Using Reg A+ And Post Offering Liquidity Briefing For Non-IPOs; Interactive Clickable Video

 

What types of mid size companies are best suited to Regulation A+ ?

In our opinion, a company’s consumer appeal is the most important factor (once we have established the strength of the management team, a strong strategy, large and growing market, rapid growth rate and barriers to competition). A large and happy customer base and tremendous consumer appeal are very indicative of success. Consumer investors are the least expensive to bring to your offering, compared to accredited investors and institutional investors.

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What types of start ups suit Regulation A+ ?

We work with mid-stage companies and mature startups that we consider a good fit for Reg A+. In our opinion, a company’s consumer appeal is the most important factor (once we have established the strength of the management team, a strong strategy, large and growing market, rapid growth rate and barriers to competition). A large and happy customer base and tremendous consumer appeal are very indicative of success.

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How can I use Manhattan Street Capital to raise money using Reg A+ ?

Manhattan Street Capital raises money from individual investors for select, low risk, start-ups, and successful mid-sized companies. Your company can raise from $4 million to $75 million each year. (there is no actual minimum, but the fixed costs of doing a Regulation A+ offering mean that it is not efficient for raising less than $4mill. Fixed costs that need to be spent before receiving the new capital are at least approx $100k).  

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Reg A+ liquidity explained for insiders and investors
Reg A+ provides that investors will be liquid upon the completion of the offering they invest in.  And up to 30% of the capital raised may be from insider selling (rarely done). But there is a lot more upside to Reg A+ than this;This answer continued
What is RegA+ Audition (TM) ?

Test how well Regulation A+ will work for your company in our new RegA+Audition(TM) program. Audition and get input from our members and investors.

This service is for you if you want to conduct a low-cost market test of your companies’ appeal to investors before you commit to the costs of a Reg A+ offering. We have put it all together for you with a separate marketing agency that provides the marketing guidance and digital advertising

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How much does a Regulation A+ IPO cost?

IPO costs

This is what you should expect in terms of costs if you decide to conduct an IPO via Reg A+.

  • Legal fee: $90k (upfront)

  • Broker fee: 8% of the total capital raised

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What are the costs involved in raising capital via Regulation A+?

As a top-level view, expect that costs for a completed offering will be in the 12%* of capital raised range, approximately, including all the different factors. The only fee that is charged as a percentage is for a broker-dealer when one one is involved. We get you a 1% Broker Dealer fee for Broker-Dealer involvement when a basic level of engagement is sufficient (which is true for most cases where the emphasis is on raising capital online).

*Fees that need to be paid before the first capital closing amount to a minimum of approximately $160k minimum and much higher for larger offerings - see below for more detail.

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How much does a Regulation S offering cost?

Costs for a Regulation S offering

  • Legal fee: $5k - $20k depending on complexity. The legal document is very similar to a Reg D offering/PPM, so for companies making a Reg D and a Reg S, the added cost of the Reg S will be small.
  • Marketing costs: We introduce experienced and efficient marketing agencies to you and help you manage them. The total cost of marketing will typically range from 4% to 8% of capital raised (not charged as a %). 

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How much does a Reg D offering cost?

Costs for a Regulation D offering

  • Legal fee: $12k - $30k depending on complexity.
  • Marketing costs: We introduce experienced and efficient marketing agencies to you and help you manage them. The early-stage cost of preparing the marketing content, the offering page and advertising will be approximately $35k. The total cost of marketing will range from 6% to 8% of capital raised (not charged as a %). 

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Cost of Taking Your Company Public Using Regulation A+, if you choose this route.

The question is what is the cost to take my company public using Regulation A+ on Manhattan Street Capital? These are the costs. The first cost is marketing so probably the minimum you could get away with for an offering that is easy to sell is 4% but 6-7% is more typical, in marketing cost. (not charged as a percentage)

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Cost guide for an STO with Manhattan Street Capital?
  • Attorney fee $12k - $60k depending on complexity. (Reg A+ is at least $50k)
  • Marketing fee paid to the agency that we introduce if needed, expect to cost 2% to 4% of capital raised not charged as a %. 

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How much does a Reg S offering cost?

Costs for a Regulation S offering

This list is intended to summarize the costs for guidance and information purposes.  It is not precise, and it is not a binding proposal. Most fees below are paid directly to the relevant service provider.

When needed, we will refer you to all the needed service providers for a very successful Reg S. We will also advise you and the service providers as allowed by the SEC regulations.

  • Legal fee: $9k - $30k, depending on complexity.
  • Marketing costs: We introduce experienced and efficient marketing agencies to you and help you manage them. The early-stage expenses of preparing the marketing content, the offering page, and advertising will be approximately $25k. The marketing cost will likely range from 6% to 10% of capital raised (not charged as a %) - depending on how appealing the company is to investors and on how well the marketing is implemented. Manhattan Street Capital brings in excellent marketing agencies and we advise you to help maximize the efficiency of the marketing programs.
  • Generally, Reg S offerings will cost 10% to 12% (MSC fees are not charged as a %) of capital raised plus warrants, depending on how much appeal your company has to investors and on the size of the capital raise (larger raises are usually more cost-effective).
  • To reach the point that the offering is raising money online, total costs will likely run about $40k and can be more with complex offering documents and with multiple videos on the offering page.

 

If you are interested, contact us.

 

Related Content:

Timeline for a Reg S offering
What is Reg S or Regulation S?

What fee does Manhattan Street Capital charge?

See the detailed fee schedule by clicking the blue button below;

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List of Alternative Trading Systems (ATS)

An ATS is an after-market exchange where people who own securities can buy and sell. Because all Reg A+ offerings are Public Offerings, listing Reg A+ securities after the Reg A+ completes on an ATS is a useful way for a company to provide liquidy to its investors. One big advantage of ATS exchanges is that shorting of stocks is not possible and naked shorting is not possible.

Reg D securities can be listed and bought and sold on ATS exchanges.

Rule 144A securities can be bought and sold on ATS exchanges.

 

The list of Alternative Trading Systems (ATS) below is sorted alphabetically.

 

Related Content:

Timeline schedule for a typical Regulation A+ offering

How much does a Regulation A+ Offering cost?

Contact Us to get started.

What Is The Timeline or Schedule For A Reg D Offering?

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Timeline Schedule For A Reg A+ IPO To The NASDAQ or NYSE

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What Is The Timeline For A Reg A+ Offering?

Schedule for a typical Reg A+ offering

Summary view timeline for a  Reg A+ offering via Convertible Notes

 

Click the Blue button below for the complete FAQ entry on this topic.

 

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What Is The Timeline or Schedule For A Reg S Offering?

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How does the investment process work on Manhattan Street Capital?

Investment process for STOs and conventional offerings. 

Step 1.

The investor enters the investment process by clicking on the "Invest Now" button on the offering page.

Step 2.

The investor completes the form and provides us with all the information that is needed to make an investment. This step doesn't take longer than 5-8 minutes.

Step 3.

The investor decides which payment method fits them the best, and send the payment. Manhattan Street Capital supports; Wire transfer, ACH, Debit and Credit card, Check.

Some companies may decide to only accept cryptocurrency payments.

Step 4.

The issuer company receives the payment. When the offering has a minimum raise amount, the money first gets deposited into the issuer company's escrow account and stays there, until the minimum amount gets exceeded. 

Step 5.

Manhattan Street Capital runs an AML check on the investor to make sure that everything is fine.

Step 6.

In the case of Reg D offerings, the issuer company has to verify it's investors to be accredited. We have a built-in solution for this in our system to assist companies that retain us. 

Step 7.

We send the subscription agreement to the investor who signs it.

Step 8.

The issuer company accepts investor and investor funds by countersigning the Subscription Agreement. 

Step 9.

In the case of an STO, the company's Smart Contract issues the investor's tokens and transfers them to the investor's wallet. In a conventional offering, the company issues its shares to the investor. 

If there is a minimum capital raise amount, the share or token issuance is delayed until the minimum is exceeded.

 

Related Content:

What much does a Regulation A+ offering cost? 

Timeline schedule for  Reg A+ IPO to the NASDAQ or NYSE

Timeline for a Reg A+ offering

Manhattan Street STO program

Is Regulation A+ an Initial Public Offering - IPO?

Reg A+ can be used for an IPO to the NYSE or NASDAQ and, starting in June of 2017 a significant number of companies have made their IPOs via Reg A+.

Click the blue button below for the whole of this FAQ.

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Create your Reg A + offering - how to make your offering the best it can be!

At the beginning, your offering will be in the TestTheWaters(TM)  process, where you are checking to see how interesting investors find your company and the idea of investing in it.

You need to make your offering accurate (no hype), entertaining, and informative in a graphical and visually pleasing manner. As time progresses, you will make your offering more and more specific. It does not need to state the size of the capital raise you would like, the valuation, or share price at first.

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The Best Ways To Use Reg A+ For An STO

A key challenge when using Reg A+ for an STO is that in most cases, the tokens have not yet been developed, so accepting payments from investors to buy the tokens directly is impossible because they cannot be delivered. Imagine selling stock in a company when you don't have any shares to sell - rather challenging! 

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How to do Updates for my Regulation A Plus Offering?

You’ve heard it time and time again - communication is key. When it comes to Regulation A+ equity CrowdFunding, this is especially true. Potential investors are the backbone of your offering. It is important, to be honest, transparent, candid and emotionally open from launch day through completion and on an ongoing basis thereafter.  

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Do I Have To Take my Company Public To Use Regulation A+ ?

The answer is No. You can choose not to list your company on a marketplace, and then your shares will not be public.  Regulation A+ allows you to make your shares liquid after the offering, but it is not required. In Tier 1 offerings the only reporting requirements post offering are to report to the SEC any significant change in the business.

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What is the Greenshoe used in IPOs?
The term "Greenshoe" option is the only SEC-sanctioned method for an underwriter to legally stabilize a new issue after the offering price has been determined. The SEC introduced this option to enhance the efficiency and competitiveness of the IPO fundraising process.This answer continued
AML Policy Statement
All investors that initiate investments on the Manhattan Street Capital platform are required to pass the AML test before they complete their investment. No investors will be accepted unless they first pass AML.This answer continued
How can I raise capital for my Real Estate company using Regulation A+ ?

We are seeing more signs that Real Estate offerings are taking the early lead in Regulation A+. The fact that consumers already understand and identify with real estate as an investment is helping, as has already been shown in the Title II/Reg D field. Regulation A+ is broadening the appeal of real estate to nonaccredited investors worldwide. Another major factor is the payment of attractive rates of interest on invested capital. Consumers find that appealing and are more likely to invest as a result.   

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Can I do a RegD 506c Offering on Manhattan Street Capital?

Yes, we do put Reg D 506c Offerings on our platform when we believe that your offering will be successful. 

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How much will it cost for reporting as a Reg A + public company if I take this route?

What is the ongoing cost of reporting having completed your Regulation A+ offering?

If you choose to be listed on the OTCQB marketplace then you’ll need to report financials once every six months with an audit once a year, and if you are listed on the OTCQX marketplace then you’ll need to report financials once every quarter, with an annual audit. If your company meets the requirements of the bigger markets, you can choose to list your company on the NASDAQ or on the NYSE.

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Our International US-STO program for companies outside the USA

It is confusing for non-US STOs to know how to access US investors while working within the US SEC regulations for securities offerings and to build a strong presence in the US market to build your business in the US market. Manhattan Street Capital is the leader in solving these problems for client companies.

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Who can invest in a Reg A+ offering?

Anyone! (see the exceptions below). Mainstreet investors worldwide can invest under Regulation A+ into companies that make their stock offerings with help from Manhattan Street Capita. Ordinary investors don’t have to be wealthy to invest! Investors are welcome from almost anywhere in the world.

The only limitation is that Main Street investors cannot invest greater than 10% of their annual income or 10% of their net worth, excluding their homes. This is a per-investor limit per company they invest in, and it only applies to Tier 2 offerings. Investors are allowed to self-verify their income and net worth. Issuers are not required to independently verify.

The inclusion of investors from “Main Street” who are not necessarily wealthy is the big deal here. Now companies can take investments from millions of people who could not participate before.

Accredited investors ($1 million or more in net worth) are not limited in how much they can invest. Investors from outside of the U.S. are welcome, with the same limits.

Please note that the regulations of your country may restrict you from investing via Reg A+ offerings. As an investor, you must check the regulations that apply to you, in your country. Subsequent to Regulation A+ rules being made effective in the USA, the Canadian regulators imposed limitations on Mainstreet Canadian investors, so most Reg A+ offerings do not accept Canadian Mainstreet investors. We have been advised that if a company gains prior approval from the Canadian States on a State by State basis, then Canadian main street investors would be allowed to invest via Reg A+.

 

Related Content:

What is Regulation A+?

What does it mean to Reserve your investment in Reg A+ ?

Reg A+ liquidity explained for insiders and investors

Advise me how to make my Reg A+ offering succeed?

Guidance and tips how to succeed with your companies Reg A+ Offering:

There is more and more evidence that at this early stage in the Reg A+ funding market, companies must resonate strongly with consumer investors to succeed. That appeal, plus first-rate marketing with front-loaded impact and budget, is required to bring in consumer investors and to prove traction early. Even in offerings that are attractive to broker-dealer syndicates, in most cases, brokers will not act to promote an offering to their clients until early success is apparent from consumer investors.

The scope of companies that will fit Reg A+ will gradually expand as wealthy investors and institutions engage. Expect to see Registered Investment Advisors begin to allocate their clients' capital in small amounts to Reg A+ offerings over the coming year. AIG stepping in, as reported last month, is significant here.

In the open forum inherent to Reg A+ offerings, success in the first few weeks is a must to show all interested parties the offering is going well.

Companies should set a low funding minimum unless they are buying a fixed price asset. This makes easier to make the offering go live and conduct the first closing and to pay for subsequent marketing from capital raised.  

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Issuer Dealer And Agent Registration Requirements for Tier 2 Offerings

These communication rules can help companies go it alone, so to speak, without the assistance of a registered broker-dealer. In a traditional offering, a broker-dealer acts as an intermediary bringing investors to the issuer for a fee. For a company seeking investors among the general population, a broker-dealer may not be necessary to have a successful Regulation A offering. Issuers are able to publish their own marketing material about the offering, create their own online campaign pages, and generally solicit their targeted investor base. This may be especially relevant for consumer-facing companies interested in engaging customer-investors.However, companies issuing securities in a public offering without the involvement of a registered broker-dealer should be aware that the company may be required to register in certain states as an issuer-dealer, or have members of its management team register as agents of the issuer. This memorandum provides an overview of the registration requirements for issuers and agents of the issuer when making offers and sales of securities in specific states that require such registration. This memorandum will focus on offerings under Tier 2 of Regulation A, as Tier 2 provides for preemption of state review of the offering and securities sold under a Tier 2 offering are considered “covered securities” under Section 18 of the Securities Act.

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Manhattan Street Capital's STO Investment Process and Services via RegD, Reg S and Reg A+

Enable investors worldwide to quickly and easily invest using any language.

Accept all popular cryptocurrencies,

Automate investor subscription document eSignature.

Conduct KYC and AML on investors.

Verify that the AML approved investor is the one who actually makes the investment where ambiguous.

Verify investor Accreditation (Reg D)

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What is the best situation to use Tier 1 in Reg A+ offerings?

These are the ideal situations where Tier 1 is best:

1) All your investors are local and in one State, and the State is easy to get your Blue Sky filing qualified. See the detailed list of States and how they work.

2) Your company is a bank that is exempt from State Blue Sky filing requirements.

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Can I Raise More Than $75 mill in a year using Reg A+?

Yes, in some circumstances. For businesses that lend themselves to segmenting their market, it may be possible to make multiple offerings by following a similar model to the one that Fundrise has used. Each Reg A+ entity is a standalone business and shares one management service provider. In this way, Fundrise has conducted multiple Reg A+ offerings simultaneously since 2016. So far this model has only been Qualified by the SEC in Real Estate situations, but the SEC may allow the same approach in other business areas. We don't know yet.

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Completed IPOs via Reg A+, Listing Here

This is the list of the companies that completed their Reg A+ IPO and listed on the NYSE or NASDAQ

Arcimoto, Inc. - $19 million (NASDAQ),

to see the whole list, click the blue button below.

 

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Which shareholders get liquid first in a Reg A+ offering?

There is no special sequence, no preference. The company itself, and any selling shareholders in an offering are made liquid on a pro-rated basis throughout the offering.  So for example, if an offering is ended at 92% of the maximum goal, then all the selling shareholders in the offering will have sold 92% of the shares that they intended to sell in that offering.

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Can I use Reg A+ if my company is not in the US?

Yes. If you set up a company in the USA or Canada then you are allowed to use Reg A+ using that entity.

Click below for more details:

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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.

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What Is The Timeline For A RegD/Reg S STO Via Convertible Notes?

Schedule For A Reg D/Reg S STO Via Convertible Notes

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What Is The Timeline For A Reg A+ STO Via Warrants?

Schedule For A Reg A+ STO Via Warrants

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What Is The Timeline For A Reg A+ STO Via Convertible Note?

Schedule For A Reg A+ STO Via Convertible Note

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What is Testing The Waters in Regulation A+ ?

Testing The Waters (TestingTheWaters(TM)) enables companies to test market themselves to see if there is enough investor interest to make a Regulation A+ capital raise successfully.

The SEC created this program so companies can make this test before having to spend the time and money it takes to make an SEC filing and get an audit done. The SEC allows companies to market themselves in TestTheWaters(TM) with few restrictions. So companies can cost-effectively conduct a test using social media, email, online advertising and more. During this process, we provide the ability for potential investors to make non-binding reservations in a company they like. We charge $1,000 per month for it, paid in advance monthly.

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What is a Security Token Offering?

A security token is a token that is sold to investors via one of the SEC regulations - Reg D, Reg S, Reg A+ and Reg CF are good examples. A Registered S-1 IPO is another route.

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What Is The Timeline For A Reg A+ Tier 2 STO?

Schedule For A Reg A+ Tier 2 STO

  • 1. Choose which funding method would be the best fit for your company, it depends on several different factors. Get legal advice on the details. We can recommend you to a securities lawyer. Select a marketing agency that will manage your 360° marketing campaign. We will introduce you to experienced marketing agencies. Get legal advice.
  • 2.A. In the case of a Tier 2 offering, you are required to have a two-year Audit, if your company has existed for less than 2 years, the audit period will be the age of your company.
  • 2.B. Engage a legal service provider to do your SEC filing. We can introduce you to good service providers.
  • 3.A. Start the Form 1A filing with the SEC. Get Qualified by the SEC.
 

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What Is The Timeline For A Reg A+ Tier 1 STO?

Schedule For A Reg A+ Tier 1 STO

  • 1. Choose which funding method would be the best fit for your company, it depends on several different factors. Get legal advice on the details. We can recommend you to a securities lawyer. Chose a marketing agency that will manage your 360° marketing campaign. We will introduce you to experienced marketing agencies.
  • 2. Engage a legal service provider to do your SEC filing. We can introduce you to good service providers. Prepare your company’s financials.
  • 3.A. In a Tier 1 STO, you may choose to raise most of the money from non-US investors. To be able to accept money from US investors, a company must satisfy the Blue Sky laws of each State that it accepts investors from. This process is expensive and it takes a long time. You can choose to accept investments only from investors in States like New York which have an efficient Blue Sky filing process, and the rest of the money can be raised from outside of the US.  

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What Is The Timeline For A RegD STO?

Schedule For A Reg D STO

  • Chose a marketing agency that will manage your 360° marketing campaign. We can introduce you to experienced marketing agencies.
  • 2.A. Engage a legal service provider to do your SEC filing. We can introduce you to good service providers.
  • 2.B. The marketing agency builds offering pitch on Manhattan Street Capital, video, PR, graphics, social media accounts, advertising.

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Compare a reverse merger with Reg A+

Buying a public shell is one way that mid-sized companies raise equity capital to grow. It is expensive, complex, and it is sometimes difficult to get over the negative history of the old public company that failed in the past (that failure is why the shell was available to be purchased).

In comparison, Regulation A+ offerings are much simpler, less expensive and they are fresh and new.  The limit of $75 million per year per company in Reg A+ does mean that some companies that are raising larger amounts of capital will still need to go the reverse merger route.

Manhattan Street Capital will only fundraise for companies that have entered our “TestTheWatersTM ” program and been rated highly by our members, achieving a non-binding IndicationOfInterest(TM) $ level from our investors that demonstrates that the company will be over-subscribed.

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What does it mean to Reserve your investment in Reg A+ ?

When you like the look of a company in its informal TestTheWaters(TM) stage, and if you would like to make a non-binding reservation, we call that "Reserve my Investment". The advantages to an investor are these:

If the company later completes a capital raise, then you will have booked yourself space in that offering at the IssuePrice(TM) (the price per share at which the shares are sold by the company).

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What disclosures are required in a Regulation A Plus offering?

Regulation A+ requires detailed disclosures that are similar to but far less extensive than for a traditional public offering under the oversight of the SEC. Think of the RedHerring(TM) that you may have seen or heard of, but with simpler requirements. The process of filing for permission from the SEC to make a Reg A+ offering involves online work using EDGAR.  Form 1A is the document that must be filed with the SEC. Dealing with the SEC is likely to be a multi-step process.

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Confusing aspects of Regulation A+

"I have to use a Tier 1 offering if I am raising less than $20 mill"

Not true.  Tier 2 Regulation A+ offerings start at zero, not at $20 million. Tier 1 offerings start at zero too, and they cap out at $20 mill. But Tier 2 offerings start at zero and extend up to $75 mill per company per year. 

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What is the "Company Offerings” Page in Regulation A plus?

Manhattan Street Capital's "Company Offerings" page is an interactive platform that gives companies the opportunity to market their offering and to engage with prospective investors. At this stage no investments can be made. This is also called TestingTheWaters(TM).

This is also the page where you will accumulate non-binding IndicationsOfInterest(TM) or ReservationsOfInvestment(TM) dollars from prospective investors. This makes it easy for companies to find out if they can successfully raise the capital they seek. During the process, companies get insights and can decide for themselves if this type of funding is right for them.  To read the complete answer click on blue button below.

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I Want To Use Tier 1. How Can I make It Work Well?

Companies that will raise most of their capital outside of the US are a great fit for Tier 1 because they do not need to make Bue Sky filings in US States. 

Another good situation is when a company has all of its likely investors in one or two States that are easy to get Blue Sky filings through.

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What advantages are there to having a low minimum raise in my Regulation A+ offering?

A low minimum such as $100k for the first closing has some significant advantages based upon observing companies doing Regulation A+ offerings:

1) A low minimum makes the offering real or "effective" very early in the process which matters hugely to the Broker-Dealers - they will not engage till that has taken place. The higher the minimum, the less engagement from the Broker-dealer syndicate a company will get to the point where they will not engage at all.  

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What is an appropriate minimum capital raise for my companies' Reg A+ offering?

The SEC is Qualifying offerings with no minimum. The advantage of a low minimum is that when the offering exceeds it, then the first closing can take place, and your company can then pay for the cost of ongoing marketing to investors from investment proceeds. 

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Do I Need A PCAOB Audit?

PCAOB audits are not required for your Tier 2 Regulation A offering, and of course, no audit is required for Tier 1 offerings (although some States do require an audit, they do not require PCAOB).

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Can I stop reporting results for my Tier 2 funded company after the offering?

Yes. In the spcial circumstance where the following conditions apply:

1) You have kept up to date with your SEC reporting obligations, 

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How To Make Your Security Token Offering via Reg A+ & RegD

This FAQ summarizes our  STO Webinar by Rod Turner with Sara Hanks about securities rules in connection with Reg A+ & Reg D. 

The interactive webinar among others answers the following questions:

- What is the difference between Securities and Utility Tokens? 

- How to do your Security Token Offering right?

- What laws are going to apply to your STO? 

- What are the securities rules exemptions that can be used for an STO?

- How does the SEC filing process work? 

Click HERE for the STO Webinar with clickable chapters. 

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What Kind Of Audit Is Needed For Tier 2 Regulation A+ Offering?

In the case of a Tier 2 offering, issuers must provide audited financial statements for the prior two years (if the company has existed that long, otherwise for the actual life of the company) in the offering statement and annual reports. For example, a one-year-old company must provide one year of audited results.

All Tier 2 Reg A+filings with the SEC have to be prepared in accordance with GAAP, and Reg A Tier 2 requires an audit opinion.

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Cost of Marketing to Investors For Your Regulation A+ Offering

The question is: what is the cost of marketing to investors for your Regulation A+ offering? These are the factors. The minimum you could get away with for an offering that is easy to sell is 4% but 6-9% is more typical, in marketing cost. (not charged as a percentage) That’s for, you have to think of all the digital marketing components, social media, public relations, advertising and various components thereof. We have agencies that we work with that are specialists in this field. You will have the most effect, the most bang for your buck by using one of them and so you reduce the risk. Increase the upside and reduce the risk reduce the cost by using one of these agencies that are specialized. So that’s about it in terms of the cost structure. The implementing factors are if you already have a product or a service with a lot of consumers liking it and strong social media presence those things will reduce the cost and increase the ease with which you can complete the capital raise.

To read the complete answer and see the VIDEO, click on the blue button below.

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Can I Raise Capital for a Private Equity Fund using Reg A+ ?

No. A PE Fund or Private Equity Fund is not allowed to raise capital using Regulation A+.

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When does the Audit expire for a Reg A+ Offering?

Financial statements can’t be more than 9 months old. For example, a December 31 financial statement will go stale at the end of September the following year.

The point at which you measure whether the financials are stale is at the time of (each) Form 1-A SEC filing and at the time of SEC Qualification.

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How to determine if a token is a security - the Howey Test

The Howey Test
The Supreme Court case of SEC v Howey established the test for whether an arrangement
involves an investment contract. An investment contract implies that the transaction is a type of security.

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Is Regulation A+ allowed for International companies?

Yes. If you set up legal Headquarters for your company in the USA or Canada then you are allowed to use Reg A+ to raise capital. Most companies that take this route set up a "C" Corporation in Delaware, but you can also set up an LLC or a Limited Partnership.

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What's the difference between Regulation A+ and Equity CrowdFunding?

Where does your company fit with the new SEC Equity CrowdFunding rules?

The SEC published new rules that expand Equity CrowdFunding to allow main street investors to invest in private startup companies, as a key part of the JOBS Act (effective at the end of January 2016). In March of 2015, the SEC also published groundbreaking new rules called Regulation A+ or Reg A+ for short (effective July 2015).

The capital raising landscape has now seen its biggest shift in decades. Now there is a fund raising continuum using online platforms that extends from startups raising seed capital of as little as $100k up through established companies raising up to $75 million per year per company.   To read complete answer click on blue button below.

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Overview Chart of Tier I Finders, Tier II Finders and Registered Brokers
https://www.sec.gov/reportspubs/investor-publications/divisionsmarketregbdguidehtm.htmlThe below chart1 provides a summary overview of some of the permissible activities, requirements, and limitations outlined in the proposed exemptive order granting a conditional exemption from broker registration for finders.2 The proposed exemptive order has not been finalized and remains subject to change. Finders may not rely on the proposed exempt activities, requirements, and limitations outlined below until such time they are made part of a final operative exemptive order, if any, issued by the CommissionThis answer continued
My company is outside the USA, can I use Reg A+?

You must establish the legal headquarters for your company in the USA or Canada

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What is a Hybrid Reg A+ Offering?

A hybrid Reg A+ offering includes both retail investor marketing to an online investing platform and software that is easy to use with a Broker-Dealer or Syndicate/Underwriter that will engage with their client investors. 

For the complete description, click the blue button below.

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RegD investor liquidity
With Reg D, it’s technically not correct to say that there is always a one-year lockup on new investors. Reg D securities are restricted, and restricted securities are always subject to limitations on their resale. There are exceptions to the one year lock up - see them below:This answer continued
Is it Possible To Raise Capital For a Venture Capital Fund Using Reg A+ ?

Venture Capital Funds that use 60% or more in certain types of simple debt and 40% or less in equity holdings are allowed to use Reg A+.

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What else does Manhattan Street Capital offer besides Regulation A+ fundraising?

Besides fundraising, Manhattan Street Capital offers the help and guidance for companies to navigate through a Regulation A+ offering. Through you interacting with our members and the Resources that participate on our site, we’ll help you improve your pitch to investors and refine your share offering terms.  

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