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Tuesday, 31 March 2015

Need To #Crowdfund Your US Launch? Try Reggae...

... er, that should read "Reg A". 

I'm indebted to Anna Pinedo and Jim Tanenbaum for pointing out that the SEC has finally done its job under Title IV of the JOBS Act. As they carefully explain in a recent Mofo Alert, the amendments to Regulation A that take effect in about 90 days time will enable private US and Canadian companies to raise up to $50 million in a 12 month period. That entity could be the holding company for a UK start-up, for example, or possibly the US subsidiary of a UK start-up, so long as it has a genuine US establishment - you know, real people and office equipment and a decent coffee machine. 

Existing shareholders may also sell reasonable amounts of stock as part of the offering. 

And eligible investors include 'the crowd' - provided they each limit their purchases to no more than 10% of the greater of their annual income or net worth (with a similar limit for non-accredited corporate entities). 

It should also be possible to combine a Reggae Reg A offering with private offering, if you really, really need the extra money.