Three Experts, Three Answers: How to Work Through Conflicting Reg A+ Advice
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When three experts give you three different answers on a Regulation A+ question, there is more work to do. I dig deeper rather than treating any one answer as the verdict. Even advice that every advisor agrees on can fall behind as SEC practice evolves.
Founders and CFOs assembling an advisory team can run into conflicting guidance from securities attorneys. This article describes how I think about that situation. It is a decision process, not a legal conclusion.
What Conflicting Reg A+ Legal Advice Tells You
When you speak to three experts and you get three different answers, you have more work to do. In my experience, that happens often with securities attorneys. I have been in many situations where the advice I received was contradictory, and I have had to dig deeper.
I treat that kind of disagreement as information that the question needs more work. I do not treat it as a verdict. For context, Reg D, Reg A+, and Reg S each have nuances, and in my experience Reg A+ has the most.
Weighing conflicting advice on your Reg A+ raise? Talk to an MSC strategist.
A Case Where Long-Standing Advice Changed
Companies sometimes run a Reg D offering alongside a Reg A+ offering, or use bonus shares, to give large investors advantageous terms so that institutional investors will participate.
For many years, the best securities attorneys told me the same thing whenever a company wanted to run both offerings at the same time. If the company is selling the same security in both, they said, it should have the same share price. The SEC would not allow even the smallest share price differential
Then I saw an instance where a company ran both Reg D and Reg A+ offerings with deep discounts available for Reg D investors that invested huge amounts of capital. In the Reg A+ offering, discounts are delivered via bonus shares, which work as an effective discount - the max discount the SEC allows by this method is 20%. An institutional investor putting in millions of dollars demands a much lower share price than an investor putting in $300.
SEC practice has evolved to allow companies to follow that model of discounting for institutional investors via the Reg D. This is now common practice. Not everyone knows this.
What Evolving SEC Practice Means for Advice
The advice in that case came from the best securities attorneys, and it still fell out of step with SEC practice. SEC practices evolve.
Ofte Stilte Spørsmål
What does it mean when securities attorneys give different answers on Reg A+?
When I get conflicting answers from securities attorneys, I treat it as a sign that there is more work to do, and I dig deeper before making a recommendation to my customer CEO.
Why can Reg A+ advice conflict?
SEC practices can evolve, and there have been situations where long-standing advice no longer matched up-to-date practice. Some attorneys were up to date, some were not.
Spørsmål?
Kontakt oss på [e-postbeskyttet] med eventuelle spørsmål. To hear more, watch the full episode, where Rod Turner joins Jason Fishman on Test. Optimaliser. Skaler.
Kontakt oss på [e-postbeskyttet] med eventuelle spørsmål.
om forfatteren
Grunnlegger og administrerende direktør, Manhattan Street Capital
Rod Turner er grunnlegger og administrerende direktør i Manhattan Street Capital, hvor han bygde plattformen som selskaper i vekstfasen bruker til å gjennomføre Regulation A+-lønnsøkninger på nett.
Han har tidligere bidratt til å bygge opp Symantec/Norton, Ashton Tate, MicroPort og Knowledge Adventure, og bygd opp venturekapitalfirmaet Irvine Ventures, der han investerte i selskaper som Bloom, Amyris, Ask Jeeves og eASIC.
Kommentarene på denne siden gjenspeiler Rods observasjoner av hva som pleier å fungere innen markedsføring for kapitalinnhenting på nett. Det er ikke juridisk, regnskapsmessig eller investeringsrådgivning.
Manhattan Street Capital er ikke et advokatfirma, en verdsettelsestjeneste, en forsikringsgiver, en meglerforhandler eller en crowdfundingportal under Title III, og driver ikke med noen aktiviteter som krever slik registrering. Manhattan Street Capital tilbyr ikke investeringsrådgivning og strukturerer ikke transaksjoner. Ikke tolk kommentarer fra Manhattan Street Capitals ansatte som en erstatning for råd fra kvalifiserte tjenesteleverandører i disse yrkene. Når Rod Turner gir kommentarer, er det basert på hans observasjoner av hva som fungerer og hva som ikke fungerer fra et markedsføringsperspektiv i nettbaserte tilbud. Han forteller ikke leserne hva de skal gjøre, bare hva som mest sannsynlig vil bli kostnadseffektivt markedsført på nett. Alle beslutninger om vilkårene for ethvert tilbud tas av selskapene som tilbyr disse tilbudene.
