What do I need for a Reg A+ Offering to be successful?

A successful Regulation A+ (Reg A+) offering requires careful planning and execution. Understanding the key components needed for a successful RegA+ offering is crucial for companies seeking to raise capital.

The comprehension of these components and how to utilize them effectively is a game changer.  This way, the future issuer can significantly increase its chances of making a compelling and successful offer.

In this blog post, we will explore key aspects for companies seeking growth through RegA+, providing valuable insights for companies navigating this fundraising strategy.


Hands-on: Reg A+ Offerings

If your company is looking to raise funds, you’ve probably considered many options for doing so. One notable development in the financial landscape is the introduction of Regulation A+ by the Securities and Exchange Commission (SEC) through the JOBS Act.

This regulatory framework has empowered companies to raise substantial amounts of up to $75 million in funding rounds, with participation open to both accredited and non-accredited investors. This expansion presents a significant opportunity for businesses to access capital from a wider range of potential backers.

If you have decided to move forward with a RegA+ offering, you’ve probably become familiar with the proces. However, what are the essential components that will contribute to the success of your offering?

Companies that are using RegA+ as a way to raise capital for their companies are successful.  However, in 2022 and 2023 we saw increased activity by the SEC targeting RegA+ companies.  So, to be truly successful, you need to read the items below so you do not fall victim to the SEC.


Compliance: Secure Your Reg A+ Offering

It’s important to understand you can have the best company ever and the most successful offering, but if you do not follow the regulations while you are raising the funds, your company might be sanctioned by the SEC or the company will need to refund investors.  

To be 100% compliant you need to be working with partners (legal, audit, FINRA Broker-Dealer, technology, marketing and PR) that can assure you that none of their RegA+ clients have been penalized by the SEC. This is a major Red Flag if they are associated.

Remember this, your partners for your offering do not get the penalties from the SEC. Rather, you and your company do! You get listed as a “Bad-Actor”. Now you need to do your homework and only work with partners who will not introduce risk into your offering.


* Bad Actor: (…) those who seek to evade regulatory requirements and harm investors for their own personal gain.

Font: Financial Industry Regulatory Authority (FINRA)


Marketing strategies for issuers 

Since the SEC allows RegA+ offerings to be freely advertised, your company will need a  marketing budget to spread the word about your fundraising efforts. If no one knows that you’re raising money, how can you actually raise money? 

Once you’ve established a budget, knowing your target will be the next important step. If your company’s brand already has loyal customers, they are likely the easiest target for your fundraising campaign. Customers who already love your brand will be excited to invest in something that they care about. 

After addressing marketing strategies for attracting investments in your company’s offering, creating the proper terms for the offering will also be essential. Since one of the main advantages of RegA+ is that it allows companies to raise money from everyday people, having terms that are easy for them to understand without complex knowledge of investments and finance will have a wider appeal. Potential investors can invest in a company with confidence when they can easily understand what they are buying. 


Cost of Raising Capital

The cost of doing an offering for RegA+ has spiked once again in the past few years. Here is what you need to know and watch out for.  It’s the small items that add up.  Do not be fooled by statements like “you are high risk.” Remember, you are NOT high risk.  You have been qualified by the SEC to raise your capital compliantly

Description Costs
Legal Form 1 A Preparations $35,000 – $75,000 (unchanged for the past 4 years)
Audit $2,500+ (unchanged for the past 4 years)
FINRA Broker-Dealer 1-3% (some firms offer capabilities beyond compliance)
FINRA 5110 Fees unchanged
Escrow $1,000 (fees decreasing; paying more is excessive)
Credit Card Max 2.8% (no company qualified for RegA+ should pay more)
ACH Max 0.80% (no ACH NSF fees)
ID, AML Investor screening for US citizens <= $1.50 per investor
eSignature No fees for adding eSignature to subscription agreements
Wire Transfers Flat fee from a bank; percentage charges are a red flag

Pay attention to the above in blue. In many cases, this is where some providers will take from 4-10% or even more of your capital raise amount.

After completing a Reg A+ offering

For a successful offering, companies should also keep in mind that they need to properly manage all their regulatory obligations once the offering is completed.
KoreConX makes it simple for companies to keep track of all aspects of their fundraising with its all-in-one platform.

The platform enables companies to easily manage their capitalization table, selling securities, and awarding equity to shareholders. Integration with a transfer agent facilitates the issuance of electronic certificates.

Even after the round, the platform provides both issuers and investors with support and offers a secondary market for securities purchased from private companies.

Final thoughts

Knowing your audience, establishing a marketing budget, creating simple terms, and having an accurate valuation will give your Regulation A+ offering the power to succeed and can help you raise the desired funding for your company.

Through the JOBS Act, the SEC gave private companies the incredible power to raise funds from both everyday people and accredited investors, but proper strategies can ensure that the offering meets its potential. 

Successful companies are those who are 100% compliant with their offering and have partners who are not only 100% compliant but also protect you and your investors..


Reg A+ SEC Reporting Obligations (part 2)


Welcome back to our RegA+ reporting journey! In the first part we decoded SEC reporting obligations, highlighting Tier 1 and Tier 2 offerings. We also broach crucial forms and compliance essentials. If you didn’t read, click here and learn all about the beginning of this special content that envelops Reg A+ compliance.

What to expect in part 2 regarding SEC forms for Reg A+?

In this article, we’ll delve into specific SEC forms vital for Regulation A+ compliance.

From Form 1-POS to Form 1-U, we’re decoding each form’s purpose, filing process, and significance in your RegA+ journey.

We will also discuss the yearly audit of Form 1-K, the semi-annual reports of Form 1-SA, and Investigate the role of Form 1-U.


SEC forms for Reg A+: Form 1-POS

When the subject is SEC forms for Reg A+, it’s essential to understand some of the key forms involved in the process, let’s begin with SEC Form 1-POS.

Also known as Form 1-POS AM, is a filing used by companies that are registering securities under Regulation A of the Securities Act of 1933. It is a part of the registration process for securities offerings conducted under Regulation A, which provides an exemption from the full registration requirements of the Securities Act.

Form 1-POS is a “post-qualification amendment” to an offering statement filed on SEC Form 1-A. It is submitted after the initial filing of Form 1-A but before the offering is finalized. This form contains information updates or amendments to the previously filed offering statement (Form 1-A) that reflect changes or additional details related to the securities offering.

Key aspects of Form 1-POS include:

Aspect Description
Amendments and Updates The form includes updates, corrections, or revisions to the information in the initial Form 1-A filing. It covers changes in offering terms, financial information, business operations, risk factors, or other material information.
Filing Process Companies file Form 1-POS through the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The form is subject to SEC review and comments, similar to the original Form 1-A filing.
Timing Form 1-POS is filed after the initial Form 1-A but before the SEC qualifies the offering statement. It allows issuers to provide updated or corrected information to potential investors and the SEC during the review process.
Purpose The primary purpose of Form 1-POS is to keep the offering statement current and accurate by disclosing any changes or additional material information that has arisen since the initial filing of Form 1-A.

Unlocking Reg A+ : Form 1-POS

Form 1-POS is part of the regulatory process involved in offering and selling securities under Regulation A. Companies intending to conduct offerings under Regulation A should work closely with legal and financial professionals to ensure compliance with SEC regulations and to provide accurate and up-to-date disclosures to potential investors and regulatory authorities.


Form 1-K – Annual Audit

Annual audit on Form 1-K requires disclosure and discussion of information regarding business operations, related party transactions,  compensation data, beneficial ownership of voting securities, identification of directors, executive officers, and significant employees, management discussion and analysis (MD&A), and the audited financial statements for the year ended (at the US GAAP level). The  Annual Audits must include updated information about Regulation A+ offerings conducted in the year covered.

Being a part of SEC forms for REG A+, Form 1-K must be filed within 120 days after the issuer’s fiscal year-end

Semi-Annual Reports on Form 1-SA (for companies that are not listed on the NASDAQ or NYSE) require disclosure and discussion of financial statements covering the applicable six-month period, including MD&A using the US-GAAP format. No audit is required on the financial statements included in a Form 1-SA.

The  Form 1-SA must be filed within 90 days after the end of the first six months of the issuer’s fiscal year-end.

Reg A+ compliance: Form 1-U – Current Report

SEC Form 1-U, also known as the Exit Report Under Regulation A, is a filing submitted by issuers to the Securities and Exchange Commission (SEC) to report certain events and information upon the conclusion or termination of a Regulation A offering.

Key points about SEC Form 1-U include:

    • Reporting Certain Events: Form 1-U is used to report specific events or material changes that occur after the qualification of the offering circular under Regulation A but before the termination or completion of the offering.
    • Information Included: The form typically includes details about the occurrence of events such as a fundamental change in the nature of the business, a change in control of the issuer, bankruptcy, the departure of directors or executive officers, or any other significant events that could affect the company.
    • Filing Process: Companies file Form 1-U electronically through the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The Form 1-U must be filed within 4 business days after the event. 
    • Purpose: The primary purpose of Form 1-U is to promptly notify the SEC and the public about significant events or material changes that could impact the issuer or the offering.

Form 1-U is an essential filing that issuers must submit to the SEC to fulfill their reporting requirements under Regulation A. Companies engaging in Regulation A offerings should work with legal and financial professionals to ensure compliance with SEC regulations and to promptly report any material events or changes that occur during the offering process.

Reg A+ reporting: Form 1-Z – Exit Report

SEC Form 1-Z is a filing used by issuers to report the termination or completion of an offering of securities under Regulation A of the Securities Act of 1933. Regulation A provides an exemption from the full registration requirements for certain securities offerings, allowing smaller companies to offer and sell securities to the public without undergoing the traditional and more extensive registration process.

Form 1-Z, officially titled “Exit Report Under Regulation A,” is filed by issuers to notify the Securities and Exchange Commission (SEC) about the conclusion or termination of a Regulation A offering. This form serves as a final report to the SEC, providing information about the completion of the offering.

Key points about SEC Form 1-Z include:

Termination Report Form 1-Z is used to report the conclusion or termination of a Regulation A offering, indicating that the offering is no longer ongoing.
Filing Requirement Issuers who have conducted a Regulation A offering that has concluded must file Form 1-Z with the SEC within 30 days after the termination or completion of the offering.
Information Included The form typically includes basic details about the offering, such as the issuer’s information, details about the securities offered, the offering amount, the offering start and end dates, and other relevant information related to the completion or termination of the offering.
Filing Process Companies file Form 1-Z electronically through the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
Purpose The primary purpose of Form 1-Z is to inform the SEC and the public that the Regulation A offering has concluded or been terminated. It helps maintain transparency and compliance with reporting obligations under Regulation A.

Best practices for Reg A+ : Form 1-Z

Form 1-Z is an essential filing that issuers must submit to the SEC to fulfill their reporting requirements upon the conclusion or termination of a Regulation A offering. Companies engaging in Regulation A offerings should work with legal and financial professionals to ensure compliance with SEC regulations and to fulfill their reporting obligations accurately and in a timely manner.

At least, for best practices for Reg A+ reporting, it’s important to understand all the details and requirements when using the JOBS Act regulations such as RegA+ to make sure you on always compliant.

Reg A+ SEC Reporting Obligations (part 1)

Regulation A+ offers great fundraising chances for companies, but understanding SEC reporting obligations might be confusing sometimes.

This guide highlights the key forms, deadlines, and compliance measures associated with Tier 1 and Tier 2 offerings. Essential info to empower you to navigate the landscape of SEC reporting obligations for Reg A+ with more clarity.

No more deciphering cryptic acronyms or wrestling with mountains of paperwork. We’ll demystify Forms 1-K, 1-SA, and 1-U, providing a clear roadmap for accurate and timely filings. Whether you’re a budding Tier 1 startup or a seasoned Tier 2 company seeking expansion, this guide equips you with the knowledge and tools to build investor trust, ensure regulatory compliance, and unlock the full potential of your RegA+ offering.

Ready to step into a world of informed decision-making? In this article you’ll discover:

  • A comprehensive breakdown of essential SEC reporting forms for Tier 1 and Tier 2 offerings.
  • Clear explanations of filing deadlines and compliance requirements.
  • Practical tips and best practices for optimizing your RegA+ reporting strategy.
  • Insights about investor trust and transparency through effective reporting.

Keep reading and join us on the first part of this journey.


Reg A+ SEC Reporting obligations

With all the talk about Regulation A+, we often overlook what a company (Issuer) must comply with in order to use the regulation. There are a number of  mandatory requirements that an Issuer must comply with when using Regulation A+ (RegA+).

RegA+ reporting requirements entail periodic and ongoing reporting for companies that have conducted offerings under RegA+ of the Securities Act of 1933. These requirements differ depending on whether a company has completed a Tier 1 or Tier 2 offering under RegA+.

Here are the general reporting requirements for RegA+:


Tier 1 Offerings

  • Companies that conduct Tier 1 offerings (up to $20 million within a 12-month period) are subject to fewer ongoing reporting requirements.


  • Following the offering, Tier 1 issuers must file a Form 1-Z exit report within 30 days after the offering is terminated or completed. This form includes information on the termination or completion of the offering and the proceeds received.


  • It should be noted that there have been zero (0) companies using this Tier.


Tier 2 Offerings

Companies conducting Tier 2 offerings (up to $75 million within a 12-month period) are subject to more extensive ongoing reporting requirements.

General reporting requirements 
Form 1-K (Annual Report): Tier 2 issuers are required to file an annual report on Form 1-K within 120 days after the end of the fiscal year covered by the report. Includes: audited financial statements, management’s discussion and analysis (MD&A), information about the issuer’s business operations, and other disclosures.
Form 1-SA (Semiannual and Quarterly Reports): Tier 2 issuers must file semiannual reports on Form 1-SA within 90 days after the end of the first six months of the issuer’s fiscal year. Quarterly reports on Form 1-SA are not required.
Current Event Reports: Tier 2 issuers must also submit certain “current event” reports on Form 1-U to report specified events promptly, such as fundamental changes, changes in control, or bankruptcy proceedings.

These reporting obligations aim to provide investors with timely and relevant information about the issuer’s financial condition, business operations, and material events that could impact their investment decisions.

It’s essential for companies that have conducted Regulation A+ offerings to comply with these reporting requirements to maintain regulatory compliance and transparency with investors.

Additionally, the specific reporting requirements and deadlines may vary, and companies should ensure they adhere to the regulations outlined by the Securities and Exchange Commission (SEC). To help in this process is important to seek guidance from legal and financial professionals to navigate these obligations effectively.

SEC Reporting Requirements – Form 1-A

SEC Form 1-A is an offering statement that companies use to register certain securities offerings with the U.S. Securities and Exchange Commission (SEC) under Regulation A of the Securities Act of 1933. Regulation A offers an exemption from full SEC registration requirements and allows smaller companies to offer and sell securities to the public without going through the traditional and more extensive registration process.


Form 1-A consists of three distinct parts, each serving a specific purpose:

  • Part I – Notification: This section includes basic information about the issuer, the type of securities being offered, and the intended use of proceeds from the offering. It provides an overview of the offering and the company’s business operations.


  • Part II – Offering Circular: This section contains the detailed disclosure document, often referred to as the offering circular. The offering circular includes comprehensive information about the company, its management, business operations, financial statements, risks, intended use of proceeds, and other material information relevant to potential investors. It is similar to a simplified prospectus and aims to provide investors with enough information to make informed investment decisions.


  • Part III – Exhibits: This part includes various exhibits and additional documents that support the information provided in Parts I and II. It may include financial statements, legal agreements, consents, and other relevant documents that help to substantiate the disclosures made in the offering circular.


Companies planning to offer and sell securities to the public under Regulation A must file Form 1-A electronically through the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. After the SEC reviews and qualifies the offering statement, the company can proceed with the public offering.

Form 1-A filings are subject to SEC review and comments, similar to the registration process for larger offerings. However, Regulation A offerings generally have less stringent disclosure requirements compared to traditional registered offerings, allowing smaller companies to access the capital markets more easily.

It’s important to note that Form 1-A is specifically tailored for Regulation A offerings and differs from other SEC forms used for different types of offerings and securities registrations. Companies seeking to conduct Regulation A offerings should work closely with legal and financial professionals to ensure compliance with SEC regulations and to prepare the required disclosures accurately and effectively.

Today, we’ve wrapped up the first part of our journey into SEC reporting obligations under Regulation A+. We’ve covered some crucial points regarding REG A+ SEC reporting obligations. So, what’s next?  In the upcoming article, we’ll dive deeper into the intricacies of these reporting requirements. We’ll help you navigate the waters of Regulation A+ and gain a better understanding of its implications for companies.

Stay tuned for Part 2!

Online Capital Formation for Private Companies

In the fast-paced private company landscape, understanding Online Capital Formation dynamics is not just a strategic advantage – it’s imperative. As we commemorate the twelfth anniversary of the JOBS Act in 2024, it’s evident that evolving capital-raising regulations have paved the way for a transformative approach to business financing. In this ever-changing scenario, everyone in the private market needs to grasp the significance of Online Capital Formation to unlock myriad opportunities for their ventures.

Table of Contents

  1. Making Capital Formation Accessible for Private Enterprises
  2. The Complexity of RegCF and RegA+
  3. Beyond Conventional Crowdfunding
  4. Seizing the Future with Online Capital Formation
  5. Final Insights


Making Capital Formation Accessible for Private Enterprises

At its core, the democratization of capital is a driving force behind Online Capital Formation. Gone are the days when crowdfunding merely conjured images of Kickstarter campaigns. Today, it has evolved into a sophisticated financial tool, especially with the maturation of Regulation CF (RegCF) and Regulation A+ (RegA+) over the past decade.

RegCF and RegA+ are two sets of rules established by the U.S. Securities and Exchange Commission (SEC) to govern equity crowdfunding. They were both introduced as part of the JOBS Act (Jumpstart Our Business Startups Act) and their primary goal is to make it easier for businesses and startups (from small to enterprises) to raise capital by offering and selling securities online.

The concept of digital securities involves representing traditional financial instruments (such as stocks or bonds) in digital form using blockchain technology. Digital securities enable more efficient and transparent transactions, and they can be traded on digital securities exchanges.

The Complexity of RegCF and RegA+

RegCF and RegA+ transcend the traditional crowdfunding model, where entrepreneurs pitch ideas for product launches. Instead, they empower companies to transform investors into shareholders. The focus has shifted from merely selling stories to selling stock – a nuanced shift that goes beyond the conventional understanding of crowdfunding.

In order to fit in each of these regulations, companies must pass the eligibility criteria for each of them and provide certain disclosures to investors, including information about their business, financial condition, and the terms of the offering. The level of disclosure required is less extensive compared to traditional IPOs, but it aims to provide investors with enough information to make informed investment decisions.

Beyond Conventional Crowdfunding

These regulations are more than regulatory frameworks; they’re a paradigm shift that offers private companies a more expansive and flexible avenue for raising capital. They allow them to raise capital from both accredited and non-accredited investors, which includes their own clients and employees. RegCF allows them to raise up to 5 million dollars while with RegA+, it’s possible to raise up to 75 million dollars.

Equity Crowdfunding is an alternative pathway to access capital markets, offering a more cost-effective and less burdensome option than a full IPO. It has helped more people invest in early-stage funding, making investment opportunities available to a wider range of investors. With these regulations, you can leverage the internet and technology to connect with more investors and grow the business.

Seizing the Future with Online Capital Formation

While the term “crowdfunding” remains rooted in popular imagination, it falls short of encapsulating the depth and complexity of RegCF and RegA+. We must recognize these exemptions have matured into a robust mechanism that demands a more nuanced understanding. They must carefully navigate the regulatory requirements and considerations as this is monitored by the SEC aiming to ensure investor protection and maintain market integrity.

To shed light on this evolution, we have collaborated with industry experts, including Sara Hanks, CEO/Founder of CrowdCheck, and Douglas Ruark, President of Regulation D Resources, now known as Red Rock Securities Law. Together, we aim to redefine the landscape by emphasizing what we believe heralds a new era in crowdfunding: Online Capital Formation

Additionally, success in equity crowdfunding often depends on effective marketing, transparent communication, and a compelling value proposition for investors.  From accessing diverse investors to increasing brand visibility, this overview highlights seven key benefits. Take a look at the chart.

# Top 7 Benefits of Democratizing Capital Formation
1 Access to Diverse Investors
2 Engagement of Customers
3 Increased Brand Visibility
4 Flexibility in Fundraising
5 Gathering Early Feedback
6 Cost-Effectiveness
7 Potential for Liquidity

A Closer Look at the Top 7 Benefits of Democratizing Capital Formation

Final insights

As private company owners and managers, the onus is on you to comprehend the evolving dynamics of Online Capital Formation. It’s not merely a trend. Embrace the opportunities, stay informed, and position your venture at the forefront of this new era in crowdfunding. The journey begins with understanding. If you’re looking to raise capital and want to know more about your company’s suitability and which steps to take first, book a call with one of our specialists.

Private Capital Market Regulations – 10 RegA+ Issuers Penalized for SEC Violation: What Can We Learn?

The Importance of Compliance in Private Capital Market Regulations

We’ve discussed compliance at length and how it’s essential for building trust within the private capital markets. But what happens when you’re not compliant?

The SEC will eventually find out and impose penalties to issuers that fail to meet securities regulations, as ten Regulation A+ (RegA+) issuers recently learned.

These recent violations can serve as a cautionary tale to issuers about the importance of adhering to Private Capital Market Regulations.

Regulation A+ and the SEC’s Oversight

Companies selling securities to raise capital generally have to register with the SEC and comply with other rules that can be expensive and onerous for smaller companies, so RegA+ allows exemptions from registration, provided certain other conditions are met. In its press release, the SEC announced that 10 RegA+ issuers failed to comply with these conditions, highlighting the challenges within Private Capital Market Regulations. The SEC reported that each issuer was previously qualified to sell securities under RegA+, but subsequently made significant changes to the offering so that it no longer met exemption requirements. These changes included “improperly increasing the number of shares offered, improperly increasing or decreasing the price of shares offered, failing to file updated financial statements at least annually for ongoing offerings, engaging in prohibited at the market offerings, or engaging in prohibited delayed offerings.”

Private Capital Market Regulations: Protecting Investors and Market Integrity

These regulations are not just arbitrary demands by the SEC; they exist to protect investors and the integrity of the system as a whole. For example, changing the offering price without getting those changes cleared by the SEC is a concern because it could be a vector for fraud or money laundering; issuing securities for a different price conceals the actual amount of money changing hands. Similarly, making unsanctioned changes to offering terms can erode investor confidence. Ideally, each investor conducted their own due diligence before investing – they felt comfortable with the terms listed in offering documents qualified by the SEC. Changing these terms without notifying investors and having changes approved by the SEC just isn’t fair play, and underscores the critical role of Private Capital Market Regulations.

The Consequences of Non-Compliance

The ten issuers cited by the SEC violated these principles, and got caught. Each company agreed to stop violating the Securities Act, and to pay civil penalties that ranged from $5,000 to $90,000. In the press release, Daniel R. Gregus, Director of the SEC’s Chicago Regional Office was quoted saying: “Companies that choose to benefit from Regulation A as a cost-effective way to raise capital must meet its requirements,” reinforcing the significance of compliance with Private Capital Market Regulations.

These penalties serve as a reminder that issuers must be careful when making changes to their offering after qualification. Working with an experienced team can help to mitigate some of this risk, but ultimately, it is the issuer’s responsibility to meet all securities regulations, including those pertaining to Private Capital Market Regulations. And as with most things, 90% of the job is preparation.

How not to fall into the wrong with the regulators checklist

  • Always check with your securities lawyer and FINRA Broker-Dealer who did your RegA+ filing before making any public statements, news releases, or announcements related to investment in your company, as these might be construed as offerings subject to SEC rules and Private Capital Market Regulations;
  • Track all your activities date, time, where distributed
  • Be thoroughly familiar with your company, its business, and how it is structured.
  • Have a clear idea of your company’s funding needs, how much capital you need to raise, what kind of equity or control you are prepared to give up in return
  • Seek advice from qualified experts: securities lawyers, broker-dealers, accountants; being familiar with your own company will help you answer their questions and get better advice.
  • Choose the right capital-raising route for your needs, whether it be a bank loan, remortgaging your house, or using one of the JOBS Act exemptions.
  • READ THE REGULATIONS! Seriously, read the regulations, and any explanatory notes from the SEC on how they apply and what you need to do to comply.
  • Make notes about the parts you’re not sure about, and ask your experts how they apply to you.

It may turn out that the exemption you initially chose isn’t the right one for your needs, so be prepared to go back and change your plans. It’s much easier to change plans before they’re implemented than it is to have to fix something that’s gone wrong with the implementation.

Once you’re satisfied with the regulation you’ve chosen, make a list of all the things you’ll need to do to carry out a compliant and successful raise. You might do this yourself, or with the assistance of your experts, but in any event you should have your experts review it to see if you’ve got anything wrong or left anything out. Execute the plan. You may need to delegate some of the items on the list to others, but ensure that there is always someone accountable to sign off on the completion of every requirement. Maintain a paper trail of who did what and when, not so much to know whom to blame but to be able to identify where something went wrong and how to fix it. Don’t panic. Mistakes happen.

Small Businesses Need Capital

Small businesses are essential to the economic well-being of a country, but unfortunately, many find it challenging to obtain the capital they need. It is expensive to access the public capital markets at the best of times, but in times of economic hardship and uncertainty,  traditional financing options become especially scarce as well. Fortunately, private capital markets have emerged as a viable and advantageous solution for small businesses to raise the funds they need to grow, sustain jobs, and contribute to their communities. 


Raising Capital is Expensive


Small businesses are often faced with tedious and expensive processes when trying to access traditional capital sources. Raising capital for companies when going public compared to private can be expensive and complicated. The costs associated with this type of fund-raising include:


  • Underwriting fees
  • Exchange listing fees to launch on the stock exchange or other public markets
  • Professional fees for attorneys, accountants, and other financial advisors
  • Printing and distribution costs for prospectus and registration statements
  • Costs associated with filing regulatory paperwork such as the SEC Form S-1


These costs can add up, and the process of going public is also typically long and complicated, requiring a great deal of time and energy from company founders. In addition, many banks impose strict guidelines limiting the amount of capital small business owners can borrow, and it might not be enough to cover the cost of going public.  For small startups especially, the possibility of going public may be decades away, if it exists at all. For organizations that need to raise capital more immediately, the private market is a much more viable option than raising capital publicly.


The Solution: Private Capital Markets


Fortunately, private capital markets provide a viable solution for small businesses during tough economic times. With private businesses able to use JOBS Act regulations like RegA+, RegD, and RegCF to raise millions in capital from accredited and nonaccredited investors, they need not rely on traditional lenders. The cost of raising capital privately using JOBS Act regulations compared to taking a company public is significantly lower. This is because:


  • Although there are still securities regulations to protect investors, the reporting requirements are much lower and less costly.
  • Private capital markets avoid the lengthy legal process involved in taking a company public, thereby saving time and legal fees.
  • Private capital markets offer more flexibility than traditional financing sources, allowing businesses to craft more creative and advantageous terms for the capital they need.


This makes it easier for small businesses to access the funds they need without having to worry about high costs and long wait times. Furthermore, leveraging private capital markets provides an opportunity for small business owners to cultivate relationships with investors who can provide valuable insights and advice that they may not be able to access through traditional lenders. And that can open more doors.

Approaching the 11th Anniversary of the JOBS Act

Eleven years ago, the Jumpstart Our Business Startups (JOBS) Act was signed into law in a White House Rose Garden ceremony. Looking back on this landmark legislation, we see its impact has been far-reaching. From increased access to capital for small businesses to the rise of new markets for investment opportunities, the JOBS Act has reshaped how companies raise funds and spur economic growth. In 2022, $150.9 B was raised through Regulations A+, CF, and D, showcasing the tremendous power of these regulations for companies. As we mark the 11th anniversary of this game-changing law, let’s look at what it has accomplished and how it is (still) changing the capital formation landscape.


David Wield: The Father of the JOBS Act


David Weild IV is a veteran Wall Street executive and advisor to U.S. and international capital markets. He has become well known as a champion of small business as the “Father of the JOBS Act”. Signed into law by President Barack Obama in April 2012, the Jumpstart Our Business Startups (JOBS) Act has opened up access to capital markets, giving small businesses and startups the ability to raise money from a much larger pool of investors. Wield has remarked that this was not a political action; it was signed in “an incredibly bipartisan fashion, which is really a departure from what we’ve generally seen. It actually increases economic activity. It’s good for poor people, good for rich people. And it adds to the US Treasury”.


As such, Weild is seen as a leading figure in the JOBS Act movement, inspiring the startup community to break down barriers and build the future. He has helped make it easier for companies to become public, empowering a new generation of entrepreneurs looking to start or grow their businesses. Furthermore, Weild’s efforts have allowed more investors to participate in capital markets.


Benefitting from the JOBS Act


At the inception of the JOBS Act in 2012, non-accredited investors were only allowed to invest up to $2,000 or 5% of their net worth per year. This was designed to protect non-accredited investors from taking on too much risk by investing in startups, as these investments would likely be high risk and high reward. Since then, the JOBS Act has expanded to allow non-accredited investors to invest up to 10% of their net worth or $107,000 per year in startups and private placements.  


For companies they were initially allowed to raise:


  • Up to $50 million in RegA+ offerings
  • $1 million through crowdfunding (RegCF)
  • Unlimited capital from accredited investors under RegD


These numbers have grown significantly since 2012, with:


  • Reg A allowing $75 million to be raised
  • Reg CF allowing $5 million to be raised


These rules have opened the door for startups to access large amounts of capital that otherwise may not have been available to them. This has allowed more companies to grow, innovate and create jobs in the U.S.


How Much has Been Raised with JOBS Act Regulations?


The JOBS Act regulations have revolutionized how capital is raised by companies and how investors access new markets. According to Crowdfund Insider, companies have raised:


  • $1.8 Billion from July 2021 to June 2022 with RegA+
  • $2.3 trillion with RegD 506(B)
  • $148 trillion with RegD 506(C)
  • $506.7 million with RegCF


Since its formation in 2012, the JOBS Act has opened up a variety of avenues for entrepreneurs to access capital. The exempt offering ecosystem has allowed innovators to raise large sums of money with relatively fewer requirements than a traditional public offering, while still requiring compliance and offering investors protection. This has enabled companies to stay in business and grow, allowing the US economy to remain competitive on the global stage.


Insights from Industry Leaders


Expanding the discussion about capital formation, KoreConX launched its podcast series, KoreTalkX in April 2022. Through this platform, we’ve hosted many thought leaders and experts to share their insights on capital-raising strategies and compliance regulations. Guests have included renowned thought leaders including David Weild, Jason Fishman, Shari Noonan, Joel Steinmetz, Jonny Price, Douglas Ruark, Sara Hanks, and many others. Each of these episodes has explored topics in-depth to provide entrepreneurs with the tools they need to be successful when raising capital from investors.

7 Things You Need to Raise Capital Online in 2023

. ising capital online can be a great way to a vast pool of potential investors. With the JOBS Act exemptions and many online funding portals available, it’s easier than ever to get started. Here are 7 Things You Need to Raise Capital Online in 2023.


1. Know Your Options


From Regulation D 506(c) offerings to RegCF and RegA+ offerings, it’s important to understand the differences between them. Each option has different requirements for time, cost, and resources. Plan accordingly for whatever option you choose by considering the trade-offs. Many issuers start with a RegD, then move on to a RegCF, and then a RegA+ because of the costs and compliance efforts required with each exemption.


2. Plan for a Higher Cost of Capital


Raising capital can be expensive. Especially when doing so online, you should plan on paying more than you usually would because of the additional costs associated with marketing, platform fees for using a crowdfunding platform, etc. These costs, along with fees for broker-dealers and legal counsel, can add up quickly, but understanding the potential costs will help you to plan accordingly. While raising capital online will cost more than a brokered or VC deal, you will retain greater ownership and control and suffer from less dilution, which may be a valuable tradeoff.


3. Find the Best Online Capital-Raising Platform


Before you embark on your journey to raise capital online, you need to find the right platform for your needs. You will want to make sure that you are working with the best platform possible. The first step is to do your research and find out which platform suits you best. You should look into the fees each platform charges, their customer service ratings, and whether or not they have any special features such as automated investing tools or portfolios with pre-set risk profiles.

Be wary of platforms that promise unrealistic returns or make promises about how easy it will be to raise capital in a short amount of time. Seek out platforms that have built up a good reputation and are transparent with their fees and services. Platforms do not raise money for you. Be sure to have a clear strategy in place before you launch your capital-raising campaign, and do not use a platform that promises too much. You can explore the list of FINRA-regulated funding platforms


4. You’re Responsible for Marketing


You’ll need to craft an effective message and have the resources available to get it out there – whether that’s through social media, email campaigns, print ads, or other forms of advertising.  When you sign up for a capital raising platform, they do not help you with marketing or getting investors. This is left up to your organization or you can hire a marketing firm that is experienced in marketing for online capital raises. Ensure you know your target market and audience so that your message resonates with the right people who will invest in your cause or project. Researching trends in the current market can help you refine your strategy over time as well. Focus on building relationships with potential investors by providing value upfront before asking them for anything monetary related – this can go far towards building trust and credibility between both parties when marketing for your capital raise.


5. Launch with an Announcement and Target Multiple Investors


Announce the closing of your last smaller raise and its success when launching your next round. You can create a sense of urgency that will attract investors and help drive interest in your offering. This proven strategy can be rinsed and repeated as often as needed (though it can be overdone, and your audience will eventually catch on that this isn’t really the last chance to invest). Another way to maximize your chances for success when raising capital online is to target multiple investor types. While it’s important to target self-directed investors online, you can also retain marketing partners to reach out to family offices and institutional investors. By targeting multiple investor types simultaneously, you’ll improve your chances of raising more capital.


6. Focus on Marketing and Platforms


It is essential to have a well-structured marketing plan. That will help you reach your target audience and create awareness of your offering. It’s also important to focus on choosing the right platform for your capital-raising efforts. Consider your capital-raising goals, the platform you plan to use to meet those goals, and the availability of resources to help you achieve success. Will your campaign primarily use affinity marketing? Or will you utilize tools such as advertising, email campaigns, and social media?


7. Get a Valuation Report and a Securities Attorney


During the process of raising capital online, understand the value of your assets and make sure that you are compliant with security laws. A 3rd-party valuation report can give you a better understanding of your company’s worth and help inform investors about its potential. These reports are available from many reputable firms, and retaining one can help you to make a more convincing case for the worth of your company. It is also essential to hire a securities attorney to ensure you comply with JOBS Act exemptions. Without a lawyer experienced in securities law on your side, you could be risking legal violations and hefty fines.


5 Tips for Frictionless Capital Raising

Raising capital can be a tricky process. Fortunately, with the JOBS Act and its exemptions from SEC registration under RegA+, RegCF, or RegD, entrepreneurs can now access capital raising 24/7/365. Here are five tips to help you make the most of this opportunity and enjoy frictionless capital raising.

Use Mobile Apps for Online Investments

Mobile apps are becoming an increasingly popular way to access capital markets and make investments online. When a company raises capital under a JOBS Act exemption, a mobile app can streamline the investment process for investors. For example, the KoreID Mobile App allows investors to manage current and pending investments and reinvest with ease. KoreID allows investors to securely manage their personal information so that they don’t have to reenter the same information each time they go to invest.

Utilize Affinity Marketing

What better way to raise capital than to leverage your existing network of customers? Customers that align with your company’s mission and values can become powerful brand ambassadors when they invest. This type of marketing also helps give potential investors a sense of trust and familiarity, which can be invaluable when it comes to securing investments. By utilizing affinity marketing, you can easily create an affinity network and unlock new capital-raising opportunities.

Seek the Crowd

Over the last year, the amount of venture capital funding has dropped significantly. Instead, online capital formation facilitated by the JOBS Act has become a powerful player in the private capital market. RegA+ and RegCF allow companies to raise capital from the general public, creating a wider pool of potential investors. And, since online capital raising is open 24/7/365, these sources of capital can be a valuable alternative to traditional funding routes.

Have a Plan and Tailor Your Pitch

Before you even consider approaching potential investors, you should always have an airtight business plan in place. This includes your stated objectives, financial projections, and any other details that provide an in-depth look into your venture. Once you’ve mapped out the specifics of your venture, it’s time to start crafting a tailored pitch that resonates with potential investors. Creating a compelling presentation with the right balance of facts, figures, and storytelling can help draw investors in and establish trust. Think about the investors you are pitching to and tailor your pitch accordingly. Are they venture capitalists and angel investors? Or are you targeting family and friends or seeking equity crowdfunding? Each type of investor has different requirements, so it’s key to understand who you are pitching to and adjust your strategy accordingly. Regardless of who you’re targeting, it’s vital that you fully understand your business plan, because investors will ask you questions that a memorized sales pitch might not answer adequately. By doing this, you can ensure that the capital-raising process is as seamless as possible.

Prioritize Compliance

When raising capital, adhering to securities regulations is essential for success. While there are many components to compliance, using a broker-dealer is one of the first things that any company should consider when raising capital. Broker-dealers can also help you navigate the complexities of securities regulations. By selecting an experienced and reliable broker-dealer, you’ll have peace of mind knowing that the process is compliant and secure. With these raises sometimes having thousands of investors on a cap table, you want to be sure that your investors are managed properly and that your raise is in compliance with the law.

Raising capital for your venture doesn’t have to be a daunting task. By following these five tips for frictionless capital raising, you can make the process as smooth as possible so you can be well on your way to securing the funds needed for growth. 


Seeking Opportunities in Times of Crisis

The collapse of Silicon Valley Bank has sent shockwaves through the financial sector, sending bank stocks plummeting, heightening stresses, and leaving many people with feelings of anxiety and uncertainty about the future. However, amidst this chaos lies a unique opportunity to innovate and create jobs, which can stand as a shining message of hope. We see this as a time for ingenuity and entrepreneurial spirit to uncover a unique solution to this crisis and serve as the spark that sets off further development in the sector. This blog will discuss how opportunity and crisis are closely linked, showcasing the potential for businesses to use this moment of disruption as a chance for growth and renewal.

The Innovation Opportunity


When crises arise, they can often be overwhelming and unsettling. But, in times like these also lies a unique opportunity for entrepreneurs to shine, by innovating solutions that meet the challenges of the moment. This is an opportune time for businesses to:


  • Make a meaningful difference.
  • Find creative solutions to problems.
  • Identify new markets for their services.
  • Develop products that can meet the unique needs of those affected by this crisis.
  • Offer creative solutions that can help bring stability and growth back to the sector.


When businesses take advantage of these types of opportunities, it can result in job growth and increased economic activity. But, to take advantage of this opportunity, companies need access to capital that can fund innovation and job creation. Fortunately, RegA+ and RegCF exist to fund businesses. And because retail investors can make investments into companies through these JOBS Act exemptions, it provides companies a source of capital even if there is decreased venture capital or private equity activity.


Raising Capital During a Crisis


In times of crisis and disruption, finding capital can also be difficult. This is especially true for start-ups that do not have access to the same resources as large businesses. Fortunately, there is a range of ways that companies can raise capital, such as through RegA+, and RegCF


Through RegA+, companies can raise up to $75 million from both accredited and nonaccredited investors. And since it offers companies the ability to turn current customers into investors and brand ambassadors, the exemption can bring a company tremendous value and help to grow the business. A Reg A raise is excellent for companies that have a wide customer base or need to raise a large amount of capital.


Like RegA+, RegCF allows both accredited and nonaccredited investors to invest in the offering. However, offerings are limited to a maximum of $5 million per year. Compared to other regulations, Reg CF is one of the most popular due to its lower cost and ease of implementation. 


These options offer companies a way to raise capital to fund innovation, job growth, and other related activities when traditional means might be less available.


The collapse of Silicon Valley Bank has sent shockwaves throughout the financial sector. But despite times of crisis like this, entrepreneurs can find unique solutions and opportunities to innovate, create new jobs, and make a meaningful difference. By seeking creative solutions that are tailored to the unique needs of those affected by this crisis, entrepreneurs have the potential to help bring stability and growth back to the sector. In addition, through access to capital through the JOBS Act, businesses can have the resources necessary to fund their growth during a time of disruption. All-in-all, the opportunity is closely linked with times of crisis, providing companies and entrepreneurs with a unique chance for growth and renewal.

What is Affinity Marketing?

Affinity marketing is an effective way to increase brand recognition and reach a larger target audience, especially when it comes to raising capital. By leveraging existing connections with customers, companies can improve their visibility and attract more investors. With the right strategy and tools, affinity marketing can be a powerful tool for businesses looking to expand their customer base and create trust between parties. 


Affinity marketing is a type of marketing strategy that focuses on creating relationships between a company and its customer base. This connection could be due to things like shared values, such as environmental sustainability or ethical labor practices. The main goal of this approach is to create loyalty and increase brand recognition. The idea behind affinity marketing is that a brand can appeal to an audience that is connected by brand loyalty, shared values, or other aspects that would make them like to make a purchase, return as a customer, or even become investors. 


Using the JOBS Act and Affinity Marketing


With Regulations A+ and CF, affinity marketing is an effective way to raise capital. By leveraging existing connections with customers, companies can reach a larger target audience and increase their chances of success. When beginning new capital-raising efforts, affinity marketing promotes a sense of trust and credibility.


Whether you have had several raises in the past or this is your first capital raise, affinity marketing is an effective way to reach a larger target audience. Leveraging your existing connections can help you gain exposure and attract more investors because people trust the brands they already know. By leveraging this group of investors, you can improve the visibility of your company and reach a larger pool by utilizing these people as a type of brand ambassador for your marketing.


Tips For Implementing Affinity Marketing Effectively


When implementing an affinity marketing strategy, there are certain steps you should take to ensure success. Here are some tips for using this type of marketing effectively:


Identify your target audience: Identify a customer base that shares similar values or had displayed brand loyalty. This will help you create a more tailored marketing plan that is specific to the target audience.


Set clear objectives and goals: Setting clear, measurable objectives and goals will help ensure that your affinity marketing strategy is successful. It will also allow you to track progress and make necessary adjustments as needed.


Communicate with your partner: Establishing a strong relationship with your affinity marketing partner, like an investor acquisition firm, is essential for success. Communicating regularly and discussing expectations, challenges, and successes will help foster collaboration and ensure successful outcomes.


Measure results: Tracking metrics such as customer acquisition rate, customer engagement rate, or return on investment (ROI) is important to determine the success of your affinity marketing strategy.


Affinity marketing is an effective way to increase brand recognition and reach a larger target audience. Especially when raising capital. By leveraging existing connections with customers, companies can reach more potential investors and create trust between parties. Additionally, tracking specific metrics can help measure success and ensure that you are meeting your goals. With the right strategy and tools, affinity marketing can be an effective way to increase brand visibility and reach a larger pool of investors.


Addressing the Decrease in VC Funding to Women-Led Startups

In recent years, the number of female entrepreneurs has grown exponentially. Many women have decided to turn their business ideas into reality. Others have leveraged the resources available to expand an existing business. Despite data suggesting that female-led startups outperform male-led startups, studies have shown that women-led startups only received 1.9% or around $4.5 billion of the total venture capital allocated in 2022, a startling statistic when $238.3 billion was raised from VC investments according to PitchBook, a decline from 2.4% the previous year. The gender gap in VC funding to women-led startups has become more pronounced.


What are the Causes of this Gender Gap?


Various factors cause the gender gap in venture capital (VC) funding, but most importantly it’s due to an overall lack of access to resources, networks, and mentors that can help female entrepreneurs succeed. Male investors dominate most venture capital firms, making it difficult for women to receive funding. Furthermore, women are not as well-represented in the technology industry. That is a key factor in obtaining VC investments due to the high growth potential of tech companies.


How Does This Affect Female Entrepreneurs?


The gender gap in VC funding can have a huge negative impact on the success of female entrepreneurs. Without adequate startup capital, developing a successful business and scaling it to profitability is difficult. This is especially true compared to male-led startups that receive more access to resources that can help foster growth.  And it’s a vicious circle. Less investment in woman-run companies makes it harder for them to succeed, which feeds the perception that they’re not good investments. With a drop in the female-owned businesses in VC funds, alternative means of capital raising like RegA+ and RegCF offer female entrepreneurs a chance to access the capital they need.


The Benefits of Alternative Capital Raising Options for Women-led Startups


With VC funding becoming increasingly difficult to attain, there are other options that female entrepreneurs can tap into to secure the resources needed for their companies. RegA+ and RegCF offer two alternatives that allow private companies to raise capital through more accessible means.


Regulation A+ is a type of private offering, exempt from SEC reporting requirements, that allows companies to raise up to $75 million from accredited and non-accredited investors. This makes it an attractive option for female entrepreneurs looking for significant sources of capital. Regulation Crowdfunding allows companies to raise up to $5 million from both accredited and non-accredited investors as well. The main advantage of this type of capital raising is that it is typically more cost-effective than a RegA+ raise. For early-stage companies, it is the ideal option.


What Can Female Entrepreneurs Do To Combat this Gender Gap?


The best way for female entrepreneurs to fight the gender gap in VC funding is by taking advantage of alternative capital-raising options. By utilizing RegA+ and RegCF, female entrepreneurs gain access to much-needed resources to launch their businesses and scale them. Additionally, female entrepreneurs need to continue networking with potential investors and other entrepreneurs to build their own trust networks. By leveraging the power of these networks, female entrepreneurs can gain access to capital from a diverse pool of investors.

Overall, the gender gap in venture capital funding is an issue that needs to be addressed and overcome by women-led companies. Regulation A+ and Regulation Crowdfunding offer two viable solutions for female entrepreneurs to gain access to the resources they need.

To sum up: With these capital-raising options, female entrepreneurs can take their businesses to the next level.

Who Does Due Diligence on Companies using RegA+?

Due diligence is an essential part of the investment process. Especially following the passage of the JOBS Act in 2012, which expanded Regulation A+ (RegA+), companies now have additional opportunities to seek capital from investors. This has created a need for due diligence on these companies that is both thorough and efficient. In this blog post, we will discuss who does due diligence on companies using RegA+ and who does due diligence on companies using RegA+.


What Is Due Diligence?


The Securities Act of 1933, a result of the stock market crash years earlier, introduced due diligence as a common practice. The purpose of the act was to create transparency into the financial statements of companies and protect investors from fraud. While the SEC requires the information provided to be accurate, it does not make any guarantees of its accuracy. However, the Securities Act of 1933 for the first time allowed investors to make informed decisions regarding their investments.  


In the context of raising capital through RegA+, due diligence means that the issuer has provided all of the necessary information to investors and securities regulators so that they comply with securities laws. This may include information like:


  • Funding: The issuer should provide a detailed plan of how the money raised through RegA+ will be used.
  • Products/Services: The issuer should provide a clear description of their products and services, as well as any potential advantages that they may have over the competition.
  • Business Plan: The issuer should provide a detailed and comprehensive business plan outlining their current and future projects, as well as realistic projections based on their financial reports.
  • Management Team: The issuer should disclose information about the company’s officers, founders, board members, and any previous experience in business that may be relevant to investors.


Issuers should also use a registered broker-dealer as an intermediary to comply with Regulation A+ (RegA+). By doing this, they will ensure that they are meeting their due diligence requirements.


Who Is Responsible for Doing Due Diligence on companies using RegA+?


When it comes to due diligence for companies using RegA+, typically, the issuer’s FINRA Broker-Dealer is responsible for conducting due diligence both on the potential investors and the company itself. The broker-dealer will be required to perform regulatory checks on investors such as KYC, AML, and investor suitability to ensure investors are appropriate for the company. Additionally, they will perform due diligence on the issuer so that they can be assured that the company is operating in a manner compliant with securities laws so that they do not present false information to investors. Failing to meet compliance standards can result in the issuer being left responsible for severe penalties, such as returning all money raised to investors. 


However, both investors and issuers have a responsibility for due diligence as well. Investors should research the company thoroughly and make sure they understand all details surrounding the offering before investing their money. This includes reviewing all relevant documents, such as the offering circular, stock subscription agreements, and other related materials that give them a good understanding of the investment opportunity and its potential risks.


Issuers also contribute to due diligence as they must work with their FINRA Broker-Dealer to ensure that their offering is compliant with all laws and regulations. This includes verifying all information provided in the offering materials and making sure it meets regulatory requirements. The issuer must also disclose all information that could influence an investor’s decision to purchase the securities. 


Due diligence is essential for both investors and issuers when it comes to investments under Regulation A+ (RegA+). Ensure that thorough due diligence is conducted ensures that the offering is conducted in a manner that aligns with the best interests of both investors and the issuer. Ultimately, due diligence is a key component when it comes to investments under Regulation A+ (RegA+) and should not be overlooked.


Understanding the JOBS Act for Real Estate

Real Estate has become increasingly popular as an asset class in recent years and investors are eager to put their money into this space. However, the high capital requirements associated with real estate investments have been a large barrier for many individuals. From February 27th to March 3rd, the KoreSummit event “Real Estate + JOBS Act + Tokenization = Liquidity” will discuss the potential of blockchain technology and tokenization for transforming this industry.


Day 1


On day one of the summit, the discussion will be centered around why real estate is an attractive asset class and what steps can be taken to help make it more accessible to a wider range of investors. Douglas Ruark, Frank Bellotti, Nathaniel Dodson, and Oscar Jofre will speak during the first day’s panel, which is sure to provide valuable insight into the industry as well as the potential opportunities that could arise with the use of tokenization and blockchain technology.


Day 2


The second day of the summit will be focused on fractional ownership, a concept that makes it possible for multiple investors to own a single asset, and attracting the right investors. Laura Pamatian, Oscar Jofre, Peter Daneyko, Richard Johnson, Tyler Harttraft, Andrew Cor, and Jillian Bannister will be leading these discussions, which will provide attendees with an understanding of how fractional ownership can help to make real estate investments more affordable and accessible while attracting the right investors.


Day 3

The third day of the summit will be all about identifying which SEC exemption is right for raising Capital. Douglas Ruark, Peter Daneyko, Chris Norton, Nathaniel Dodson, Oscar Jofre, and Louis Bevilacqua will explain how to make the offering to retail, institutional, and accredited investors. These sessions will provide a great opportunity to learn from the experts and gain insight into how to ensure that your projects reach the right investors.


Day 4


The fourth day of the summit will focus on what companies should do once their real estate offerings are live. Panelists will include Kim LaFleur, Mona DeFrawi, Andrew Corn, Peter Daneyko, Amanda Grange, and Ryan Frank. This session is sure to provide attendees with valuable information about understanding what steps to take once their offering is live.


Day 5


The final day of the summit will look at private real estate shares and how they can be traded. Peter Daneyko, Kiran Garimella, Lee Saba, James Dowd, Frank Bellotti, and Laura Pamatian will provide insight into the concept of tokenization for private shares and how it can help to bring liquidity to this sector.


The upcoming KoreSummit is sure to provide invaluable insight into real estate and how blockchain technology and tokenization can help to make this asset more accessible and liquid. Attendees will have the opportunity to learn from industry leaders and gain valuable knowledge on how to successfully launch and promote their offerings. With the JOBS Act paving the way for real estate tokenization, this summit is an ideal way to get ahead of the curve in what is sure to be a huge market in the years to come. 


Sign up for the upcoming KoreSummit here


Selling Shareholders for RegA+

For many investors in the private market, one of the risks they face is the lack of a liquid market for selling shares.

Through a Reg A+ offering, however, accredited investors who purchased securities during a Reg D or Series A raise can sell a portion of their holdings, creating a powerful buy incentive.

The law allows issuers to allocate up to 30% of their Reg A+ offering to selling shareholders, and investors are under no obligation to sell stock. 

What is a Selling Shareholder?

A selling shareholder is an individual or entity that sells securities of a company in a registered offering.

The shares sold by selling shareholders are first offered to other shareholders on a pro-rata basis before being made available to the general public.

Selling shareholders are typically early investors in a company who are looking to cash out some of their investment. They may also be employees or insiders who are looking to sell a portion of their holdings.

In some cases, selling shareholders may be venture capitalists or other institutional investors who are looking to exit their investment before a company’s IPO.

Selling Shares with a Reg A+ Offering

The Reg A+ selling shareholder allowance is a valuable tool for companies seeking to raise capital from accredited investors.

For investors to sell their shares with a Reg A+ offering, the company must file an amendment to their offering circular with the SEC that includes a selling shareholders section.

The amendment must disclose the number of shares being sold and the maximum offering price. In addition, all selling shareholders must be identified in the 1A.

The Reg A+ selling shareholder allowance is a great way for companies to raise capital while letting investors potentially get a return on their initial investment.

The allowance also provides an incentive for accredited investors to participate in a Reg A+ offering, as they can receive immediate liquidity without waiting for a company to go public.

If you’re considering a Reg A+ offering, consult with your securities attorney to determine if the selling shareholder allowance is right for your company.

Call Centers for RegA+

A call center can be extremely helpful for companies looking to raise capital through a Reg A+ offering. By having a dedicated call center, businesses can easily keep track of all the investors who are interested in their company and ensure that they are meeting all compliance requirements. Additionally, a call center can assist investors with forms. This can help to build trust with potential investors and increase the chances of a successful raise. 

For companies using RegA+, prioritizing compliance is essential for a successful offering; a non-compliant raises risks of SEC penalties. This can be a daunting task for companies, as there are many different regulations to keep track of, and some of these rules have implications for the call center. 


In this regard, the call center cannot act like a broker-dealer, which means they cannot sell securities. If the investor has questions about whether or not an offering would be a good investment decision, the call center cannot answer this. However, if the issuer noticed that a potential investor was filling out a form that was not completed, a call center could reach out and see if there was a technical or logistic issue that the investor was experiencing, such as where they could find a routing number or where to fill in other important information. 


Still, the call center can direct the investor to resources like the offering circular if they have questions about the investment and its risk. And if the issuer has placed a firm focus on compliance, the offering circular should be a significant source of information for investors to make their decision based on their risk tolerance.


A call center can also yield useful, practical information about the market, by noticing and reporting patterns about the sorts of questions clients are asking. Similarly, if there are trouble spots in an online application that are a source of confusion, the feedback from a call center can help to identify them and suggest improvements.


These are just a few of the ways a call center can be helpful in a company’s Reg A+ offering and beyond. We interviewed Sara Hanks for a KoreTalkX in which she mentioned the topic. Learn more here:


If you aren’t current in your Reg A reporting, you could still be violating securities laws even if qualified by the SEC

It’s 1-SA filing season again for Regulation A filers, and time to make some observations about the consequences of not filing.

We have encountered more than three companies in the last three months that have not filed all (or in one case, any) of their ongoing filings, and yet have requalified their offerings or qualified new offerings. This is a problem.

Let’s start with the ongoing reporting requirements. Assuming a Reg A filer has a December year-end, under Rule 257 it has to file its annual Form 1-K by April 30 and its semi-annual 1-SA by September 28 (subject to adjustments for leap years and weekends). It may also need to file “current” reports on Form 1-U. We’ve posted previously about what to do if you miss these deadlines.*

Rule 251 says the exemption for offers and sales under Regulation A is available for companies that have made all the filings required under Rule 257 for the last two years.

If an issuer makes offers and sales supposedly under Regulation A while it is not in compliance with Rule 257, those offers and sales are not made in compliance with Regulation A and unless the issuer can fit them into another exemption from registration (unlikely), the issuer has made unregistered sales of securities in violation of Section 5 of the Securities Act and those sales are subject to rescission (having to buy the securities back).

“Hold on a minute,” our non-compliant companies might say, “we might have missed making these filings, but we filed a new Regulation A offering on Form 1-A or a PQA and the SEC qualified us, so they must reckon our filings are in order, yes?”


Older securities lawyers among us (maybe it’s just me these days) will remember the “Tandy” language that we used to have to put in effectiveness or qualification requests. That says, in effect, that just because the SEC says you are ok to proceed with your offering, it doesn’t mean it can’t come after you later for some issue with your filing. While we don’t have to put that language in qualification requests anymore, that is still the SEC’s position, and they remind us that the issuer is responsible for the adequacy of its filings “notwithstanding any review, comments, action or absence of action by the staff”. Moreover, on any Reg A filing, right there on the cover, we have the mandated statement:


So no, the SEC qualifying your offering does not mean that anyone has signed off on the adequacy of your filing history. (I wish they would, but that’s not what that “QUALIF” posted on EDGAR means).

Issuers, before filing PQAs or new 1-As, check that you are up to date with your ongoing reporting. Brokers and lawyers, you are gatekeepers, so I don’t know how you think you are meeting your professional responsibilities if you don’t check an issuer’s filing history before making those filings. That should be at the top of your due diligence list.



*If an offering is open for over a year, the issuer also has to file post-qualification amendments (“PQAs”) to its filing to add its ongoing disclosure to the offering circular, but that’s a topic for a future blog post.


This article was originally written by our KorePartners at CrowdCheck. You can view the original post here.

Labor Day: Democratization and Opportunities to Create Jobs

The growth in Regulation A+ and Regulation CF offerings fuels entrepreneurship and job growth in the United States. Since 2016, there have been over 4,600 capital offerings utilizing Reg A+ or CF, with over $500 million raised in 2021 alone. This capital helps companies grow, create jobs, and positively impact their local communities. Crowdfunding is a robust tool for businesses to secure funding, with an average of 43.8% of pre-revenue startups successfully using this method.


Crowdfunded Capital and Democratization


When businesses utilize crowdfunding, they can access a much larger customer base, allowing them to have a more significant impact on their local communities. it is particularly well-suited for getting loyal customers, employees, suppliers, and other stakeholders to become investors in your company. Crowdfunding enables the democratization of the private capital market by giving these parties an opportunity to participate in the investment process, something that has not been practical before with traditional investing. For many companies, this unlocks a powerful opportunity and  42% of raises reach their goal in 3 days. 


Creating Job Opportunities


With over $1 billion in capital raised through Reg CF at an average of $1.3 million per raise, these businesses create innovation and bring economic change to local communities in the form of spending and jobs. An estimated $2.5 billion went into local communities from crowdfunded companies in 2021 alone, with money changing hands as much as six times before leaving the local economy. This demonstrates how crowdfunding directly impacts many communities across the country. It brings money to a community by creating jobs; companies that utilize regulated crowdfunding support over 250,000 American jobs across 466 industries. That number is expected to grow as the private market continues to expand. 


Crowdfunding allows all types of businesses to access the capital they need to grow and create jobs through Reg A+ and Reg CF. Between 2000 and 2019,  small businesses created 10.5 million US jobs, while large companies only created 5.6 million, according to 2020 data from the US Small Business Administration. This highlights the importance of small businesses within the economy. However, many small businesses have not traditionally had the same access to capital as large ones. This changed with the JOBS Act, increasing the availability of capital for these small businesses and leveling the playing field. As these companies continue to receive capital from the JOBS Act exemptions, the economy continues to benefit from the democratization of capital. 


It’s not only the number of jobs that are important but also the quality of those positions. Good jobs lead to a better living standard. When people have good jobs, they can afford to make purchases, give their children better access to education, access healthcare whenever needed, and many other positive benefits for these individuals. At the same time, they support businesses within their community, which helps those grow as well. A strong economy also attracts business investment from other parts of the country and the world. All of these factors lead to more jobs, and the cycle continues.


Investing in the Future


The expansion of crowdfunding presents opportunities for anyone interested in becoming an investor, with a chance to get in on the ground floor of the next big thing, while also supporting businesses and creating jobs. It’s a win-win for everyone involved, and it all starts with the democratization of capital. When you invest in a company through crowdfunding, you can invest in your community. The money that is raised through these offerings stays local, and as the businesses grow, they pump even more money back into the economy.


Crowdfunding is an excellent way to support businesses and create jobs, but it’s also a great way to invest in the future. With the industry expected to continue to grow, now is the time to get involved. With opportunities for everyone, from accredited to retail investors, there has never been a better time to get involved in the democratization of capital. So this Labor Day, remember that when you support businesses through crowdfunding, you also help create jobs and create a brighter economic future.


The SEC Can Stop Your Regulation A Offering At Any Time

The SEC has two powerful tools to stop your Regulation A offering anytime.

Rule 258

Rule 258 allows the SEC to immediately suspend an offering if

  • The exemption under Regulation A is not available; or
  • Any of the terms, conditions, or requirements of Regulation A have not been complied with; or
  • The offering statement, any sales or solicitation of interest material, or any report filed pursuant to Rule 257 contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in light of the circumstances under which they are made, not misleading; or
  • The offering involves fraud or other violations of section 17 of the Securities Act of 1933; or
  • Something happened after filing an offering statement that would have made Regulation A unavailable had it occurred before filing; or
  • Anyone specified in Rule 262(a) (the list of potential bad actors) has been indicted for certain crimes; or
  • Proceedings have begun that could cause someone on that list to be a bad actor; or
  • The issuer has failed to cooperate with an investigation.

If the SEC suspends an offering under Rule 258, the issuer can appeal for a hearing – with the SEC – but the suspension remains in effect. In addition, at any time after the hearing, the SEC can make the suspension permanent.

Rule 258 gives the SEC enormous discretion. For example, the SEC may theoretically terminate a Regulation A offering if the issuer fails to file a single report or files late. And while there’s lots of room for good-faith disagreement as to whether an offering statement or advertisement failed to state a material fact, Rule 258 gives the SEC the power to decide.

Don’t worry, you might think, Rule 260 provides that an “insignificant” deviation will not result in the loss of the Regulation A exemption. Think again: Rule 260(c) states, “This provision provides no relief or protection from a proceeding under Rule 258.”

Rule 262(a)(7)

Rule 262(a)(7) is even more dangerous than Rule 258.

Rule 258 allows the SEC to suspend a Regulation A offering if the SEC concludes that something is wrong. Rule 262(a)(7), on the other hand, allows for suspension if the issuer or any of its principals is “the subject of an investigation or proceeding to determine whether a. . . . suspension order should be issued.”

That’s right: Rule 262(a)(7) allows the SEC to suspend an offering merely by investigating whether the offer should be suspended.

Effect on Regulation D

Suppose the SEC suspends a Regulation A offering under either Rule 258 or Rule 262(a)(7). In that case, the issuer is automatically a “bad actor” under Rule 506(d)(1)(vii), meaning it can’t use Regulation D to raise capital, either.

In some ways, it makes sense that the SEC can suspend a Regulation A offering easily because the SEC’s approval was needed in the first place. But not so with Regulation D, and especially not so with a suspension under Rule 262(a)(7). In that case, the issuer is prevented from using Regulation D – an exemption that does not require SEC approval – simply because the SEC is investigating whether it’s done something wrong. That seems. . . .wrong.


As all six readers of this blog know, I think the SEC has done a spectacular job with Crowdfunding. But what the SEC giveth the SEC can taketh away. I hope the SEC will use discretion exercising its substantial power under Rule 258 and Rule 262(a)(7).


This post was written by KorePartner Mark Roderick and the original post can be found here. Mr. Roderick is an attorney at Lex Nova Law, where he leads the firm’s Crowdfunding and Fintech practice. He writes a widely-read blog at CrowdfundingAttorney.com and is a featured speaker at Crowdfunding and Fintech events across the country, including New York, Texas, Chicago, and Silicon Valley. Mark is one of the most prominent Crowdfunding and Fintech lawyers in the United States. He represents portals, issuers, and others across the country and around the world.

Opportunities to Invest in the Private Capital Market

The private equity market is rapidly growing, fueled by expansions to the JOBS Act exemptions in 2021. By 2030, the private capital market is anticipated to grow to a total value of $30 billion. This is largely driven by more companies seeing the potential in regulated crowdfunding through RegA+ and RegCF, and the rising interest of retail investors looking to move into the private space. Plus, research has shown that there is nearly $5 trillion in uninvested funds held by private equity firms alone. In addition, retail investors now represent 25% of the security trading volume in the public markets, a significant increase from the previous decade. According to BNY Mellon, “a new generation of younger retail investors are purchasing equities with the intention of becoming long-term market participants.” These factors have coalesced to create a favorable environment for investments in the private capital market. 


With favorable conditions to invest in public companies, there are many emerging and attractive industries for investors. Some of these include:


  • Medtech: Every day, companies are creating lifesaving technologies to improve human health and revolutionize medical care. Medtech companies often require high amounts of capital to fund clinical trials, research and development, and the many other processes they must go through. Since offerings limits for RegA+ were expanded to $75M, Medtech companies are increasingly viewing the exemption as a viable choice for raising capital.


  • Cannabis: The cannabis industry is rapidly growing, especially as public perception grows more favorable and legalization at the state level spreads across the US. However, cannabis companies are often underserved by traditional financial institutions due to the illegality at the federal level. With RegCF and RegA+, cannabis companies can tap into a vast market of retail investors who are willing to invest in an evolving industry.


  • Real Estate: Traditional real estate investments are capital intensive, making them cost prohibitive for many investors who are not high net worth individuals, private equity, or institutional investors. However, with RegA+ and RegCF, retail investors can own fractions of properties. And in, 2020, insurance, finance, and real estate accounted for 53% of qualified RegA+ offerings and 79% of the funds raised through the exemption. This indicates that real estate is an attractive investment opportunity for many investors. 


  • Franchises: JOBS Act exemptions create new opportunities for franchisees and franchisors to raise capital. These companies often have existing customers, who can become investors and brand ambassadors.


Regardless of the industry, a key component of any offering is the broker-dealer. Many states require issuers to work with a broker-dealer when selling securities in those states. A broker-dealer ensures that the issuer follows all SEC and state securities laws. More importantly, working with a FINRA-registered broker-dealer gives investors confidence by verifying that the issuer has provided all required information for the investors to make a sound investment decision. FINRA protects American investors by ensuring that brokers operate fairly and honestly. Plus, the broker-dealer also completes compliance activities, such as KYC, AML, and investor suitability and due diligence on the issuer themselves. 


Working with a broker-dealer ensures that the issuer behaves compliantly and gives the investor peace of mind when investing in one of the many investment opportunities within the private capital market.