RegA+ Offers Stability for Issuers

When a company decides to go the RegA+ route, they are opting for a more stable and regulated way to raise capital. This is due in part to the stability of the price; once a company goes public, its stock price can change rapidly and unpredictably because of factors like news, earnings reports, analyst ratings, and supply and demand. By contrast, a RegA+ stock is only allowed to fluctuate within a certain percentage from the original offering price, which makes it a more stable and predictable investment. With a RegA+ offering, the price is set ahead of time and will not change unless there is a significant shift in the market. This makes RegA+ an attractive option for investors looking for a more stable investment.


For example, companies that do a RegA+ raise and set their company shares at $5.80 a piece will likely see their shares at a similar price 12 months later. Because shares are unlisted on a public exchange, the share price will stay the same for a while, giving investors some stability in their investment. This stability can be ideal for companies and their shareholders, as it gives them a chance to better plan and predict their finances. 


It also gives companies more control over the price of their shares, especially when there are selling shareholders. For example, ATLIS’s stock price went from $5.88 to $15.88 to $27.88 before being listed on the NASDAQ. When companies like this do a Reg A+ before other raises, they can halt and reprice their company before going public. 


The stability of RegA+ can be attractive to both companies and investors. It allows for better planning and forecasting of finances and peace of mind knowing that the share price will not rapidly change. This predictability is one of the main reasons why Reg A+ has become such a popular way to raise capital in recent years.


If you’re looking for a more stable investment, RegA+ may be the right option for you. With a set price and no sudden changes, you can know what to expect from your investment. This makes it an ideal choice for those looking for a regulated and predictable way to raise capital. Whether you’re a company or an investor, the stability of RegA+ may be just what you’re looking for.


KoreClient Spotlight: Bruce Lewis of BulletID

Bruce Lewis is a serial entrepreneur who has had his share of successes and failures. He is now 82 years old and has started a new company that he’s made his life’s mission. Through this venture, BulletID, Lewis aims to reduce gun violence by tracking ammunition. We recently got to sit down and speak with him about his work with BulletID and how JOBS Act regulations will help his company grow.


With his years of experience growing companies and his entrepreneurial spirit, Bruce Lewis is confident that BulletID will be able to make a difference in the fight against gun violence. Lewis is no stranger to hard work and determination, and he hopes his latest venture will be successful in positively impacting the world. As an entrepreneur since childhood, Lewis has always had a knack for starting and scaling businesses. He has tried various ventures, some of which have been more successful than others. However, he has never given up and always maintained the entrepreneurial spirit he received from his father and grandfather. 


One of Lewis’ earliest and most successful businesses came from a restaurant equipment supply company that he owned and operated after he married his high school sweetheart. By acquiring the 45 companies that supplied his restaurant supply company with unique products, Lewis was able to create a company that would eventually grow to 100 million in sales and over 1,000 employees by 1988. One of these companies was an early adopter of placing UPC barcodes on items, and his partners put it out in the rest of the world, while Lewis implemented it in Canada. BulletID would eventually utilize this barcode concept. 


Lewis was devastated after hearing the heartbreaking story about a four-year-old killed by a stray bullet at a birthday party; he knew he had to make a difference. In 2016, Lewis started BulletID to reduce gun violence by tracking ammunition using the same barcode technology originally designed to let supermarkets better manage their inventory. Through this company, law enforcement and military personnel can instantly track essential information about a bullet, such as inventory, ownership history, manufacturer, and type. This is done through a barcode printed into the brass cartridge. With this information, it will be easier for authorities to trace a bullet back to its owner and determine if it was used in a crime. Additionally, it makes it easier for the military to track their ammunition, especially when hundreds of millions of dollars worth of ammo is scrapped each year because of poor tracking capabilities. With BulletID, the process is as easy as scanning the cartridge on a smartphone, and from anywhere in the world, law enforcement and military can see available details within 10 seconds. 


“Criminals never leave the gun behind, but they do leave the shell cases behind. A homicide detective can scan [the casing] and it tells them who owns it. It’s a miracle but it works,” said Lewis of how BulletID can be used by law enforcement. Lewis hopes that by tracking ammunition, law enforcement and military personnel will be able to reduce gun violence by keeping ammunition out of the hands of criminals or easily identifying suspects in a gun-related incident. 


Lewis is hopeful that BulletID will successfully make a positive impact on the world and plans to make this his mission for the rest of his life. He, and his team, are filled with energy and excitement for what they’re building. And, with the help of JOBS Act regulations like Reg A+, BulletID continues to raise the necessary capital to accomplish this goal. As he says, “the technology is there. Governments just need to embrace the technology.”


Regulation CF(RegCF), D (RegD), A (RegA+) Disclaimer

This communication may be deemed to be a solicitation of interest under Regulation CF (RegCF), D (RegD), A (RegA+) under the Securities Act of 1933, in which case the following applies:

  • No money or other consideration is being solicited, and if sent in response, will not be accepted;
  • No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;
  • A person’s indication of interest involves no obligation or commitment of any kind; and 
  • An offering statement, which would include a preliminary offering circular, has not yet been filed with the SEC.

Why RegA+ Offerings Fail

When it comes to RegA+ offerings, there are several reasons they may fail: a failure to comply with regulatory requirements, a failure to budget for the offering properly, or a failure to assemble sufficient expertise. Most of these can be attributed to a lack of commitment; if organizations do not take these necessary components of the process seriously, then RegA+ offerings are set up for failure from the start.


Compliance for RegA+ Raises


Complying with regulations is one of the most important aspects of a RegA+ offering. However, many companies try to cut corners regarding compliance, thinking they can save time and money. This is a huge mistake that can have disastrous consequences. Not only will failing to comply with regulations result in fines and penalties, but it can also jeopardize the entire offering. When experiencing an audit or investigation, companies that have not been compliant with regulatory requirements often face much harsher consequences than those who have made an effort to stay compliant. Even if the raise completes without fines or penalties from the regulator, sloppy or half-hearted compliance raises the risk of being sued by an investor for some real or imagined offense. By wholeheartedly committing to the spirit and letter of the regulations from day one, and with the assistance of professionals well-versed in the regulatory requirements (a FINRA broker-dealer, an escrow agent, or an SEC-registered transfer agent), you can increase your chances of a successful RegA+ offering while protecting your company from potential legal problems down the road.


Budgeting for a RegA+ Raise


Budgeting is essential for a successful offering. Companies must have the proper funding to hire professionals, comply with regulations, and market the offering effectively. Without adequate funding, a company is likely to run into problems along the way. A RegA+ raise is a complex and costly undertaking, and companies should be prepared to commit the necessary funding before beginning the process. Including a well-thought-out budget in your business plan is one of the keys to success when raising capital through a RegA+ offering.


Affinity Marketing


Many companies turning to RegA+ aren’t just looking to raise capital; there’s something they want to do with the capital. Whether this is a product they want to make or a service they want to provide that they’re passionate about, they’re committed to that mission. Affinity marketing is a great way to connect with like-minded investors, show them that commitment, and bring them on board. This is much harder to do if the company isn’t actually committed to that mission in the first place.


Technology and Expertise


For issuers learning new technologies and working with experts in a field that they don’t know much about, it can be a daunting process. It takes commitment to learn these new technologies or do what the broker-dealer is advising, understanding that this is the path toward a successful offering. If you’re not sufficiently committed, you might just shrug this off as not worth the cost or effort.


Companies should take away from this that a successful RegA+ raise requires a commitment to the process from start to finish. Commitment is a willingness to put in whatever it takes to succeed: to invest the time and resources necessary, comply with regulations, budget appropriately for the offering, and assemble a team of experienced professionals. With a commitment to these essential components, a company can increase its chances of success and avoid the pitfalls that have led to the failure of other RegA+ offerings.


What is the Estimated Budget for RegA+ Issuance?

Navigating the fundraising process and understanding how much to budget from a financial standpoint is one of the most frequent questions we receive. In the process of conducting a RegA+ offering ourselves, KoreConX has researched the estimated budget for a RegA+ offering.


While the budget varies based on several factors, you need to keep in mind the size of your raise and sector. As a general rule of thumb, it is a good idea to be ready to spend at least $250,000 on a successful RegA+ offering, $50,000 of which should be dedicated to getting your investor acquisition started. Most of your budget will be spent on Investor Acquisition. Now, this will not apply to every company but should serve as a general guide as to what you should expect a RegA+ offering to cost depending on the amount raised. 


Estimated Costs for USA-Based Companies:

What Why/ Work to be done When How much
USA Lawyer To file your SEC Form 1A and state filings First step in moving forward $35-$75k 
Auditors Are required to be filed with your Form 1A   First step requirement $3,500 +
SEC/State Filings Required regulatory Filings    $5k 
FINRA Broker-Dealer 8 States require you to have a Broker-Dealer to sell securities to investors  Begin engagement when you start with lawyer  1-3% fees 
Investor Acquisition

  • PR Firm
  • IR Firm
  • Video
  • Social media
  • Media Firm
  • Advertising
  • Webinar
  • Newsletter
  • Publishers
These firms prefer to be engaged right after you file, as the clock begins and gives them only 45-60 days when you go live.  Depending on size of offering you will spend up to $200k-$400k. Before you file your Form 1A  $25-50k at the beginning to start
Investor Relations Director Hire an internal resource to manage incoming inquiries from potential investors.  Handle outbound calls from investor leads. $4,500/month
KoreConX All-In-One platform End-to-end solution $4,500/month
Investment Platform Requires 45-60 days to set up After you retain your lawyer  Included with your KoreConX All-in-one platform 
Live Offering During the live offering you will have to pay for ID, AML fees required   Ranges from $0.58/person, these fees are provided at cost
Live Offering During the live offering you will have to pay for your Payment processors ( Credit Card, ACH, EFT,  Crypto, WireTransfer, IRA)   These fees are provided at cost
SEC-Transfer Agent Required as part of your Form 1A filings  After you sign up with lawyer  Included with your KoreConX All-in-one platform 
Secondary Market Ability for Shareholders to trade private company shares. Included with your KoreConX All-in-one platform 
TradeCheck Report Ability to trade in all 50 states, include Blue Sky registration, and listing National Securities Manual Included with your KoreConX All-in-one platform 



Estimated Costs for Canada-Based Companies:

What Why/ Work to be done When How much
USA Lawyer To file your SEC Form 1A and state filings First step in moving forward $35-$75k 
Canada Lawyer $5k-$10k
Auditors Are required to be filed with your Form 1A   First step requirement $3,500 +
SEC/State Filings Required regulatory Filings    $5k 
FINRA Broker-Dealer 8 States require you to have a Broker-Dealer to sell securities to investors  Begin engagement when you start with lawyer  1-3% fees 
Investor Acquisition These firms prefer to be engaged right after you file, as the clock begins and gives them only 45-60 days when you go live.  Depending on size of offering you will spend up to $200k-$400k Before you file your Form 1A  $25-50k at the beginning to start
Investor Relations Director Hire an internal resource to manage incoming inquiries from potential investors.  Handle outbound calls from investor leads. $4,500/month 
KoreConX All-in-one platform $4,500/month 
Investment Platform Requires 45-60 days to set up After you retain your lawyer  Included with your KoreConX All-in-one platform  
Live Offering During the live offering you will have to pay for ID, AML fees required   Ranges from $0.58/person these fees are provided at cost
Live Offering During the live offering you will have to pay for your Payment processors ( Credit Card, ACH, EFT,  Crypto, WireTransfer, IRA)   These fees are provided at cost
Transfer Agent Required as part of your Form 1A filings  After you sign up with lawyer  Included with your KoreConX All-in-one platform 
Secondary Market Included with your KoreConX All-in-one platform 
KoreTrade Report Ability to trade in all 50 states, published in the Securities Manual Included with your KoreConX All-in-one platform 

Private Capital Trends for the Cannabis Industry

As the cannabis industry continues to grow, so does the need for new methods of raising capital. Revenues have doubled over the past three years, and the industry is on track to reach $25 billion annually by 2025, or $14.1 billion for CBD alone, but traditional methods such as bank loans and private equity are often unavailable to cannabis businesses, forcing them to turn to the private market for capital. While often more flexible and forgiving than the public market, the private market can be a challenging place to raise capital without the knowledge and experience. 


The Constantly Growing Industry of Cannabis


The cannabis industry is changing, and new opportunities for entrepreneurs are coming. Thanks to the JOBS Act, businesses in the cannabis industry can now use regulations like A+ and CF to raise capital from the general public. This offers several advantages, particularly the ability to reach a larger pool of investors and thus raise larger sums of money.


However, the most significant advantage of Reg A+ is that it allows businesses to retain more control over their company. Traditional methods of raising capital typically require businesses to give up a larger share of their equity. This is especially beneficial for businesses in the cannabis industry, which is still in its early stages and is constantly changing. With Reg A+, companies can raise capital from the general public while avoiding the costly process of going public. With more control over their company, and the ability to avoid costly IPOs, firms in the cannabis industry can better position themselves for success.


Investing in the Private Cannabis Market


The private market for cannabis investments is growing rapidly as the legalization of cannabis spreads throughout the US. Entrepreneurs are looking to get in on the ground floor of this new industry, and there are several options available to them when it comes to investing in cannabis. 


Private CBD companies, such as Stigma Cannabis and UNITY Wellness, are turning to online capital raising to fund their growth. These diverse companies focus on many aspects of the industry, from CBD supplements to CBD skincare products, and represent only two of many companies innovating in this space. Regulations A and CF provide excellent opportunities for these companies and the investors looking to support them. 


Getting started as an investor in the rapidly evolving private cannabis industry can be scary, but it’s also an exciting opportunity with many challenges and rewards. You can make the most of this unique opportunity by educating yourself on the process and available resources, and looking for and researching a private cannabis company that resonates with you as an investor. 


For cannabis companies looking to raise capital, the process begins by identifying the team that will help you reach your goals, such as experienced securities lawyers, broker-dealers, investor acquisition firms, transfer agents, and other parties critical to your success. However, you should also consider how you can turn customers into investors and brand ambassadors as they will be essential throughout your capital-raising journey.


Cannabis Industry Trends in 2022


Cannabis companies are benefiting from increasing consumer acceptance of the product in 2022. In states where cannabis is legal, tax revenue from sales has been significantly higher than predicted. This trend will likely continue as more states legalize cannabis, and the industry becomes more mainstream. It could also remove many barriers to entry for potential investors and entrepreneurs looking to enter the space.


Despite the current political environment, which is generally unfavorable to cannabis companies, several bills are making their way through Congress that could positively impact the industry. The SAFE Banking Act, for example, would allow FDIC-insured banks to offer their services to cannabis companies, providing much-needed financial infrastructure. 


The industry will almost certainly continue to grow because of the acceptance of cannabis and its use in a variety of products. The cannabis plant produces several compounds with medical, industrial and commercial applications, with THC and CBD only the most well-known.  Developing these products and bringing them to market is creating more jobs, stimulating the economy, and becoming more accepted by people from all walks of life.


Growth in the cannabis industry is not likely to slow down anytime soon. Investors and companies interested in the industry should keep a close eye on developments at the state and federal levels and the financial health of companies in the space. With the right mix of factors, the cannabis industry could achieve even greater heights in the years to come.


Recapping Our All-Star June Podcast Guests

Throughout June, we were happy to host another set of excellent speakers to add to our KoreTalkX series, covering timely topics like digital securities, RegA+ for cannabis, and the potential RegA+ unlocks for companies in the Medtech space. Keep reading to explore each episode in more depth. 


KoreTalkX #5: Digital securities matter; tokens, coins, and regulations.


The June lineup of KoreTalks kicked off with episode #5, during which Andrew Bull discussed the future of digital assets and their impact on the financial industry. As digital securities enter the mainstream, their potential to protect issuers and create opportunities for investors grows with the transparency they can offer. However, education will continue to be an important factor in driving the expansion of the digital asset space. This conversation is helpful for anyone interested in learning more about digital assets and their impact on the financial industry. With their experience in traditional finance and digital assets, Andrew Bull and Dr. Garimella provide valuable insights into this growing industry based on their observations of the industry’s development. 


KoreTalkX #6: Cannabis businesses need capital. Let’s raise it.


Reg A+ is a powerful tool for companies in the private sector, and it is no different for those in the cannabis industry. In KoreTalkX #6, Brianna Martyn of Big Stock Tips discussed the importance of due diligence when investing in the cannabis industry, advising investors to research and understand each company’s fundamentals before investing. Brianna spoke with Jessica Trapani of KoreConX about our role in helping private companies raise up to $75 million from brand advocates and customers without going public. 


KoreTalk #7: The MedTech ecosystem is booming.


The JOBS Act was signed into law two decades ago, yet we are just beginning to see more Medtech companies utilize the RegA+ exemption to raise capital. In the last KoreTalkX episode for June, Stephen Brock and Peter Daneyko discussed the benefits of the Jobs Act and how it will help businesses grow and create jobs. Especially in the Medtech space, which is traditionally capital-intensive, RegA+ provides a tremendous opportunity for companies to raise needed capital while retaining more ownership of their company. Additionally, the speakers also discuss new, game-changing opportunities for investors, who are now able to invest in companies that align with deeply personal values. 


If you’d like to watch any of these episodes in full, you can catch them on your favorite podcast platform. Click here to view episodes on Spotify, Amazon, or iTunes.

It is time to meet your MedTech A+ Team

With our KoreSummit on RegA + for Medtech companies quickly approaching, we’d like to introduce the speakers we are thrilled to have for this informative event an exciting and life-changing industry. It is time to meet your MedTech A+ Team.


Dawson Russel
A branding and marketing expert with over ten years of experience in the industry. He has helped over 100 companies build their brands and tell their stories to the right audience thanks to his specialty in creative storytelling. His company, Capital Raise Agency, provides full-scale branding, marketing strategy, website design and development, video production, lead generation, social media, email, native ad campaign management, and more. At the upcoming Medtech KoreSummit event, Dawson will be speaking about how to build a brand and tell a story that captivates an audience.


Scott Pantel
President and founder of Life Science Intelligence, a company that ​​provides deep knowledge of the healthcare industry, guiding clients with actionable data to identify significant trends in medical devices, diagnostic, and digital health technologies that are rapidly evolving in the industry. At the upcoming KoreSummit, Scott will be discussing where Medtech companies can begin when embarking on their capital-raising journey. His wealth of knowledge on the topic will help entrepreneurs better understand the potential of Regulation A+ and how it can be used to grow their businesses. 


Stephen Brock
CEO of Medical Funding Professionals, a company that helps innovative companies in the healthcare field gain access to capital. Stephen is also passionate about ensuring founders, early employees, and investors retain control of their companies. For many companies in Medtech, this means introducing them to the potential of Regulation A+, which is just beginning to see more adoption by companies in this space. Stephens’s expertise in the Medtech field will shine through in his participation in the event’s panels.


Douglas Ruark
A corporate finance expert who has been involved in the securities industry for over two decades. He has experience with SEC-exempt securities offerings and provides advisory services for clients preparing and executing Regulation D, Regulation CF, and Regulation A+ offerings. We are excited for Douglas to share his knowledge at the KoreSummit event, where he will be speaking about Form 1A and the regulatory requirements for filing. 


Shari Noonan
CEO and Co-Founder of Rialto Markets, has over 20 years of experience in financial services, giving her unique insight into the private market. Shari will be joining the event to discuss the topic: “Form 1A: What is it, the regulatory requirements, and all you need to complete the filling and go live.” This makes her a valuable speaker at the upcoming event as she can offer information on the topic from both a regulatory and technological perspective for MedTech companies. 


Andrew Corn
Founder and CEO of E5A, a marketing firm specializing in RegA+ offerings. With over 25 years of experience in the industry, Andrew has a unique perspective on raising capital through marketing. He will be speaking at the upcoming KoreSummit on how Medtech companies can sell the story, not the stock. Through marketing, companies can reach a wider pool of potential investors, including those who are not accredited investors. Andrew brings his world-class knowledge of marketing Regulation A+ offers and acquiring the right investors for a company’s raise.


Nick Antaki
Corporate attorney with experience in securities offerings and private placements, providing legal services to small and medium-sized businesses, including entity structuring, regulatory strategy, trademarks, copyrights, and trade secrets. Nick’s experience will be valuable to KoreSummit attendees as they look to raise money for their businesses, and he joins his colleague Doug Ruark from Reg D Resources.


Joel Steinmetz
COO and co-founder of Rialto Markets, with over 20 years of experience in the financial services field. He saw the many obstacles issuers and investors faced in the private placement market, opening up the opportunity to bring efficiency to inefficient markets, and inspiring him to co-found Rialto Markets.


Lee Saba
CTO and Head of Market Structure at Rialto with over 20 years of experience in financial services. We are excited to hear Lee share his thoughts in this growing Reg A+ vertical.


Matthew McNamara
Managing Partner at Assurance Dimensions and has over 20 years of experience as a Certified Public Accountant. He specializes in SEC and private company audits, focusing on technology, manufacturing, retail, construction, nonprofit, and transportation industries. Given his broad experience in accounting and auditing, McNamara is well-positioned to provide valuable insights on financial reporting for MedTech businesses.


Andy Angelos
President of Forward Progress, a company that provides end-to-end solutions for investor marketing, lead generation, and customer acquisition campaigns. Their battle-tested strategies connect you with accredited and nonaccredited investors to provide growth capital for your business. Andy will be speaking at a talk on “sell the story, not the stock” at the upcoming KoreSummit, sharing his expertise on connecting with investors and delivering sustained growth. With his vast experience in marketing and capital acquisition, Andy will surely give an insightful discussion that will be valuable for anyone in attendance.


John Hayes
Co-founder and CEO of Raising Stakes Media, a company that provides marketing and advertising services for businesses hoping to raise capital through a Reg A+ offering. With over 25 years of experience in the media industry, John brings a wealth of knowledge to the table for effectively telling a company’s story.


Oscar Jofre
Co-founder, president, and CEO of KoreConX. He has long been a passionate advocate for expanding the private capital market to increase opportunities for companies and investors alike. Part of his mission at KoreConX is to establish an ecosystem of trusted partners that can help investors and issuers succeed through the JOBS Act exemptions. 


Peter Daneyko
KoreConX’s CRO and brings a wealth of knowledge to the table regarding business development, startups, and sales. He will be speaking at the KoreSummit about Secondary ATS and Form 1A: What is it, the regulatory requirements, and all you need to complete the filling. This is essential information for anyone in the MedTech industry looking to go live with Reg A+, as it can be challenging to navigate the regulatory landscape. 


Dr. Kiran Garimella
Chief Scientist & CTO at KoreConX, is a world-renowned expert in artificial intelligence and machine learning, with over 20 years of experience in the technology industry. His experience and expertise make him a valuable asset to the KoreSummit, and he will talk about preparing for your live offering and secondary ATS.


Amanda Grange
Transfer specialist with KoreConX and returning for the upcoming KoreSummit event. She brings her experience to the table to discuss what issuers should be aware of when going live and the preparations they need to make to set themselves up for potential success.


It’s not too late to sign up for the event. You can register for the half-day webinar event here. It’s completely free to attend! 


Private Equity’s Primetime Has Arrived

Private equity’s primetime has arrived! This stems from a number of reasons, including favorable economic conditions for the private capital market. In fact, 42% of private equity limited partners report a 16% net return in this space. Here are three factors in particular that have caused private equity to outperform public equity in 2022.


1) Interest Rates:

A survey found that 71% of global private equity investors have indicated that their equity investments have outperformed their public equity portfolios since the global financial crisis. This is in part because private equity firms are less reliant on debt financing than public companies. Higher borrowing costs will hit public companies harder, putting them at a competitive disadvantage over private companies with rising interest rates.


2) Economic Uncertainty:

Some degree of uncertainty characterizes current economic environment. This can be attributed to the ongoing trade conflicts between the United States and China, Brexit, and the coronavirus pandemic. These factors have made it difficult for public companies to make long-term plans and invest for the future. Private equity firms, on the other hand, are better suited to deal with economic uncertainty. This is because they can take a longer-term view and are not as reliant on short-term results.


3) Regulation:

The increased regulation of public companies has made it more difficult and expensive for them to operate. Private companies are not subject to the same level of regulation, giving them a competitive advantage. Additionally, private companies can benefit from registration exemptions, like RegA+ and RegCF, which allow them to raise capital from everyday investors without the need to go public. This provides private companies a significant tool they can use to their advantage and fuel their growth.


These combined factors show that private equity has arrived and is here to stay. This will likely continue in the future, making private equity an attractive investment for investors. More individuals are involved in the private markets with the rise in forms of private investment for regulated and non-regulated investors, such as the JOBS Act regulations. This means more capital is flowing into private markets, which drives up valuations. With the current market conditions, investors would be wise to allocate a portion of their portfolio to private equity to protect and grow their wealth and prepare their portfolios for the future.

How Can a Foreign Company use RegA+

For many issuers outside of the United States, the ability to raise capital from a wide pool of investors, including “the crowd” is immensely compelling. However, for foreign issuers to be able to use RegA+, there are some important considerations to keep in mind.


First and foremost is whether the company would be eligible to offer securities to U.S. investors. Foreign companies should seek the advice of qualified legal counsel to ensure compliance with all applicable U.S. laws and regulations. Additionally, foreign companies should consider the costs associated with making a public offering under RegA+ and the ongoing reporting requirements imposed on the company if it elects to use this securities exemption.


Benefit from RegA+ as a Foreign Company


The benefits of using Reg A+ for foreign companies are tremendous. Perhaps most importantly, RegA+, as a securities exemption, allows companies to raise $75 million from non-accredited investors. The exemption also enables issuers to “test the waters” concerning interest in their securities before officially launching the offering


Using RegA+ as a Foreign Company


It is vital first to understand the process and what is required when looking to do a RegA+ raise. Foreign companies should be aware of the following when using RegA+:


  • The company must be registered as a US company with a principal place of business in the US.
  • The company must have two years of audited financial statements.


While RegA+ offers a foreign company a simplified path to raising capital in the United States, several requirements still need to be met for the offering to be successful. These requirements include:


  • Filing a Form 1-A with the SEC.
  • Passing an SEC review process.
  • Engaging a US-based registered broker-dealer.
  • Disclosing all material information about the company and the offering.


However, like any method of raising capital, RegA+ may not be suitable for all foreign issuers. This makes it incredibly important to engage a knowledgeable team that can guide issuers through the process.


What Does ATS Mean in Trading

Many investors are turning to the private capital market to make long-term investments in light of the current market conditions. This has increased alternate trading systems and secondary market trading for RegA+, RegCF, and RegD securities. An alternate trading system (ATS) is a non-exchange trading venue that matches buyers and sellers to trade securities. In the United States, an ATS must be registered with the Securities and Exchange Commission (SEC) and must comply with specific regulations.


Different Forms of ATSs


There are many benefits to using an ATS, such as increased liquidity, lower costs, and greater flexibility. For example, an ATS can provide more liquidity for a security by providing shareholders with a means to sell private company shares. In addition, an ATS may offer lower costs than an exchange, such as no membership fees or listing requirements. In addition, an can often be categorized as an electronic communication network, dark pool, crossing network, or call market.


  • Electronic Communication Network: An ECN allows buyers and sellers to exchange shares without a middleman. Trades can also happen outside of business hours, which means that hours are not tied to the traditional stock market.
  • Dark Pools: A dark pool is a type of ATS that does not publicly display the prices or orders of its participants. Dark pools are typically used by institutional investors, such as hedge funds, to trade large blocks of shares without moving the market.
  • Crossing Network: A crossing network is very similar to a dark pool, meaning that the details of a trade are not made publicly available 
  • Call Markets: In a call market, trades are only executed once a certain number of orders has been reached, often at a set interval of time. 


Secondary market trading of RegA+, RegCF, and RegD securities can take place on an ATS, which is typically a registered broker-dealer platform. These platforms allow investors to buy and sell these securities even if the buyer did not invest in the initial offering. The secondary market for RegA+ securities is the most developed due to the long history of these securities. The main difference is that RegCF and RegD shareholders are required to own their securities for a longer period of time before they can be traded in a secondary market.


What is the Difference Between an ATS and Exchange?

Many people are familiar with the concept of an exchange; whenever you buy stocks in publicly traded companies, you go through a stock exchange like the New York Stock Exchange or NASDAQ. National securities exchanges are self-regulatory and their members, or listed companies, must meet the requirements established by the exchange. Exchanges are also SEC-registered


An ATS is much like an exchange in that it brings together buyers and sellers of securities. However, the main difference is that an ATS does not take on regulatory responsibilities. Therefore, an ATS can trade both listed and unlisted securities, like those purchased under a JOBS Act exemption. ATSs are also regulated by the SEC but must be operated by a FINRA-registered broker-dealer.


The Impact of Liquidity on Investing


Liquidity is an important concept to understand when trading securities and refers to the ability of a security to be bought or sold quickly and at a fair price. A security that is easy to buy and sell is said to be liquid. A security that is difficult to buy or sell is said to be illiquid. An investor might consider the liquidity of a security when making an investment decision. For example, an investor might choose to invest in a liquid security if they plan on selling it quickly. An investor might choose to invest in an illiquid security if they are willing to hold it for a more extended time. When trading securities on an ATS, it is crucial to consider the security’s liquidity. A security that is not liquid may be challenging to sell, and worth considering the liquidity of a security before investing in it.

Quarterbacks: Their Role and Why They’re Essential for Your RegA+ Raise

In the world of Reg A+, quarterbacks are essential to a successful offering. They play a critical role in the overall success of an offering, and their importance should not be underestimated. This article will explore the role of the quarterback and explain why they are so crucial for Reg A+. 


What is a Reg A+ Quarterback?


A quarterback works with issuers to advise and bring the necessary players to the table in a RegA+ offering. They are essential to ensure everything goes smoothly, lending their capital raising expertise to aid issuers on their capital raising journey. Without a quarterback, a company can easily overlook the nuances and complexities of securities regulations. A quarterback’s role is to manage and monitor the entire process. Doug Ruark, founder and president of Regulation D Resources Enterprises, Inc., defines the role of the quarterback as someone who has got to “work with clients that are looking to execute a securities offering, and need to get everything structured. Companies need to get all of their offering documents drafted, they need to go through the filing process with the SEC. And then, typically, a quarterback provides compliance support as they, company and quarterback, move forward and execute their offering”.


For a company to file with the SEC under RegA+, it must go through qualified testing. This is where a company’s financials, management team, and other factors are analyzed. A quarterback is essential in this process as they can provide valuable insight and knowledge about the company. Without a quarterback, a company may be at risk of not being fully prepared for this vital step.


The Importance of a Quarterback


A quarterback is a crucial part of any capital raising activity. They will be a valuable asset in the process and can help you avoid any costly mistakes. Some key QB responsibilities include:

  • Provide non-legal advisory services to management teams
  • Coordinate fundraising efforts with online platforms or crowdfunding portals
  • Facilitate communication between issuers and financial professionals like broker-dealers
  • Assist with due diligence
  • Work with marketing teams to establish marketing strategies
  • Other services to streamline the offering


Reg A+ Raises and QBs


By preparing well for a Reg A+ offering with a quarterback, companies can put their best foot forward and make a strong impression on potential investors. Having a well-coordinated team in place is critical, as is having all the necessary documentation and financials. Quarterbacks play an essential role in ensuring all the pieces are in place and working together smoothly so that when it comes time to present to investors, companies can do so with confidence. Quarterbacks can help their companies make a successful Reg A+ offering and attract the funding they need to grow by taking the time to do things right from the start.


Credit Cards, Escrow, and Broker-Dealers for RegA+ = $75 Million for Cannabis Companies


“It’s About Time”


Up until now, it was a real challenge for Cannabis companies to take advantage of Reg A+ exemptions that allow private companies to raise up to $75 million from the crowd; accredited and non-accredited investors alike.  So you have the investor community’s appetite, the table is set and they are ready, willing, and able; but what else do you need?


FINRA Broker-dealer


The regulation is meant to create jobs, allow private companies another way to raise capital, and allow for the investor community at large to participate. Before RegA+ exemptions, many potential investors were left looking into the candy store without any way to invest.  So with the democratization of capital and the ability of an untapped investor community to now have a seat at the table, the broker-dealer becomes an all-important intermediary.  In a highly regulated environment, the Broker-dealer takes the onerous task of KYC, ID verification, and AML ( anti-money laundering) off the issuer’s shoulder;  so you, the Issuer, can run your business without worrying about this important compliance requirement. As a result, you not only have the opportunity to gain large groups of investors but also develop brand advocates who share in your story.


Escrow Agent 

After the broker-dealer, you need an escrow agent that can hold funds from investors in all 50 states and territories and only charge you one flat fee. 


This key intermediary holds the investors’ funds on behalf of the Issuer until the broker-dealer completes the ID, KYC, and AML verification. Once these checks are complete, the escrow agent can release the funds. Until recently, a couple of historical challenges for industry sectors such as cannabis included the inability to get Escrow for their capital raises. Not only is Escrow now available but also at a cost-effective price point and with normalized fees, which is really the way it should have always been.  


Credit Cards 


Now below 2.9%  allowing both cannabis companies and their shareholders to be fairly treated when investing in the growth of their companies;  bringing jobs to communities and opportunities to those that believe in the company. Being responsible with your credit cards is common sense. Still, the ease of use and points as an added bonus is certainly one of the nice perks and perhaps a big reason for their high usage via crowd participation in private capital raises.


If you’re part of the Cannabis ecosystem looking to learn more about how KoreConX can help you on your capital raising journey, please fill out the form here.

What Due Diligence Do I Need for My RegA+ Offering?

If you’re thinking of conducting a RegA+ offering, you’ll need to do some due diligence first. This blog post will outline what you should investigate before proceeding with your offering. We’ll cover the key areas you need to look at, including the company’s financials, management, and business strategy. So if you’re ready to take the plunge into RegA+, make sure to read this post first.

Be a Diligent Issuer

Due diligence is an essential part of the securities offering process. Issuers must carefully examine all aspects of their business and operations to comply with securities laws and regulations. Due diligence aims to identify and assess any risks associated with the offering, including reviewing the company’s financial statements, business plan, and disclosures. Issuers must also consider potential risks related to proceeds, insider trading, and other potential conflicts of interest. Due diligence is vital for RegA+ issuers because it helps to ensure that the offering is compliant with securities laws and regulations. It also helps to protect the company and the investors by identifying any potential risks associated with the offering.

When it comes to RegA+, issuers must conduct significant due diligence to ensure a successful offering to protect their interests and stakeholders. The first step in due diligence is the review of all documentation, including the offering circular and any other related materials. The goal is to get a complete understanding of the offering and to identify any potential risks. They can protect their interests and those of their stakeholders by doing so.

The next step is the assessment of activities. Issuers must assess their actions and identify any potential risks so they can ensure they meet regulatory requirements. They must also be clear in their marketing materials to ensure that they are not misleading potential investors.

The final step in due diligence is the review of marketing materials. Issuers must ensure that their marketing materials are not misleading and that they comply with all regulations. They can protect their interests and those of their stakeholders by doing so. If information is not accurate or is contradictory with information the issuer has published elsewhere, it can cause problems for the offerings.

Tips for Issuers

When you’re looking to conduct due diligence on your own business, it’s essential to have a clear plan of attack. Here are five things to keep in mind when preparing to complete due diligence for a RegA+ offering:

  1. Start by reviewing your business plan and finances. Make sure you understand your company’s goals and how it is making money.
  2. Look at your management team and Board of Directors. Ensure they are qualified and have the experience to run a successful business.
  3. Conduct a thorough review of your company’s operations. Make sure you understand your manufacturing process, marketing strategy, and sales channels.
  4. Keep your cap table up to date; ensuring it documents who holds shares in your company.
  5. Ensure you do not have information on your website that contradicts information in your offering documents.

These are just a few aspects that help you conduct due diligence more effectively and efficiently. Due diligence is an integral part of any business transaction, so it’s worth getting it done right.

Be Diligent with your Offering

When working with an attorney, you must provide them with all of the relevant information about your company and the offering. This includes both the business and financial aspects of your company and any legal issues or risks that you may be aware of. Attorneys will then use this information to help assess the offering and to identify any potential risks.

Auditors will also need access to all relevant information about your company and the offering. They will use this information to verify that everything is in order and that there are no financial risks associated with the offering. Auditors will also work with the attorney to identify any potential legal risks.

Working with both an attorney and an auditor during the due diligence process will help to ensure that your RegA+ offering is successful. By providing them with all of the relevant information, you can help reduce the risk of mistakes being made and help to keep everyone on track.

A Look Back on the Last Year of RegA+

Marking a huge step forward in equity crowdfunding opportunities for entrepreneurs and investors alike, one year ago, the SEC’s game-changing decision went into effect that allowed businesses to raise $75 million through RegA+ and $5 million from RegCF. These new limits were a significant increase from the former $20 million and $1.07 million limits for RegA+ and RegCF, respectively. To celebrate this one-year anniversary, we take a look back at the progress that has been made and how this new fundraising avenue is benefiting startups and businesses of all sizes.

The History of RegA+ and RegCF

Regulation A+ and Regulation CF are securities offerings brought to life through the JOBS Act, passed in 2012. They allow companies to raise money from investors without going through the process of a complete initial public offering.

Regulation A+ was created by the US Securities and Exchange Commission (SEC) as an amendment to Regulation A of the Securities Act of 1933. It allowed companies to raise up to $50 million from unaccredited investors, a limit increase to $75 million in March 2021.

Benefiting from JOBS Act Regulation

The main benefit of Regulation A+ is that it allows companies to avoid some of the more demanding regulatory requirements that are usually associated with a public offering. It is also less costly, which is essential in creating more opportunities for issuers to take advantage of the exemption. For Tier I offerings, companies are required to file audited financial statements and ongoing reporting. On the other hand, Tier II offerings do not have requirements to register with state securities regulators.

RegCF allows companies to offer and sell their securities to the general public, including unaccredited investors, through crowdfunded ventures. Both Regulation A+ and RegCF are a way for companies to raise money without giving up significant equity or control of their company. The main drawback to both RegA+ and RegCF is that they are not as well-known as other fundraising methods, such as an IPO or private equity. As a result, it can be more challenging to find investors who are willing to invest in a company through either of these methods, but there are ways to be ready for this capital-raising journey.

Despite this, there has been a surge in companies using Regulation A+ and RegCF in the past year. This is likely because traditional fundraising methods are becoming increasingly difficult  and cost-prohibitive for startups and small businesses. Another main reason is the substantial increase in the amount a company could raise with these regulations, making it also an attractive way to raise capital for larger offerings like in real estate or Medtech.

Increase in Capital Raised

Once more reliable Q1 numbers become available, we can better estimate how much was raised in the year since the capital that RegA+ could raise was increased. In 2020 before the change in the amount of capital companies could raise, it is estimated $1.48 billion was raised from RegA+. In 2021, when the increased capital raise was available for most of the year, over 2 billion was raised.

In 2020, $239 million was raised using RegCF before the changes to how much capital could be raised. When the amount that RegCF could raise was increased from a little over a million to $5 million, the total amount raised in these campaigns soared to $1.1 billion in 2021. We do not have exact numbers yet on how much has been raised in the year since the capital increase, but this figure is expected to double in 2022. This would mean that in the three years since the increase in how much capital could be raised, over $3.5 billion has been raised with these methods. This number will continue to grow as people become more comfortable with these types of investment vehicles and as the infrastructure surrounding them becomes more robust.

By lowering the requirements for entry into capital raising with these regulations and increasing the amount that can be raised, the JOBS Act has allowed more people to invest in the growth of small businesses. This, in turn, is helping to create jobs and support the economy.

David Weild, Former Chairman of the NASDAQ and Father of the JOBS Act, had this to say about the increase in how much capital companies could raise; “It means more capital will be available for entrepreneurs, allowing their ideas to become realities and helping create living wage jobs across the U.S.”

This is a huge win for small businesses, investors, and the economy. The increase in how much capital can be raised has allowed more people to invest in small companies, which helps create jobs and support the economy.

In the past year, there has been a surge in the number of companies that have used Regulation A+ and RegCF to raise capital. This is likely due to these methods being less well-known than other forms of fundraising, such as an IPO or private equity. The increase in how much can be raised with RegA+ and RegCF has allowed entrepreneurs more access to capital without giving up ownership or control over their company.

Secondary Market Trading for RegA+, RegCF, and RegD

As more and more companies look to raise capital in the private capital market, it’s essential to understand the different exemptions available for this purpose. In this blog post, we’ll look at three common types of capital raises; Reg A+, Reg CF, and Reg D. We’ll discuss the critical differences between each one and how they are traded on the secondary market. By understanding the nuances of each type of raise, you’ll be better equipped to make informed investment decisions.

If you are raising capital, three main exemptions will be used in the private market. Before we discuss the differences, let’s cover what each regulation does:

  • RegA+ is a securities exemption that allows companies to offer and sell securities to US investors and raise up to $75 million in a 12-month period through Reg A+.
  • RegCF allows companies to offer and sell securities to US investors and raise up to $5 million through online marketplaces and crowdfunding sources in a 12-month period.
  • RegD is a securities exemption that allows companies to raise capital from accredited investors without limit within a 12-month period.

There are a few key differences between the three types exemptions but today we’re focusing on those differences as they pertain to the secondary market. The important thing to consider is the time an investor is required to hold the security before selling it on a secondary trading platform. Reg A+ is the closest to an IPO, and assets can be sold the next day, and there is no lockout period. On the other hand, securities sold under RegCF cannot be sold for the first 12 months after buying it unless it’s sold to an accredited investor, back to the issuing company, or a family member. With Reg D, investors can not sell these assets for six months to a year unless they are registered with the SEC.

We’ve covered other differences between the three exemptions in a previous article, including the number of investors and the amount they can invest. However, once the raise ends, the secondary market is the next important difference to be aware of so that shareholders can be properly informed before, during, and after the raise is complete.

Attracting Impact Investors

Founders and executives of startup and early-stage healthcare companies seeking funding historically were limited to appeals to Venture Capital firms, Angels, and bootstrapping – struggling to survive by internal growth alone. In many cases, the founders resort to selling their businesses for values well below their potential. Fortunately, their options have increased due to

1. The Emergence of the Impact Investor

The economic devastation from the coronavirus and its evolving variants is a once-in-a-lifetime event that super-charged the nascent trend of individuals and institutions to invest in ventures intended to improve the quality of life. The dollar value of “impact investing” – experienced “remarkable growth over the past ten years, reaching $2.1 trillion in 2020, according to the International Finance Corporation (IFC).[i] Impact investments are investments made to generate positive, measurable social and environmental impact with a financial return. The bottom line is that impact investors look to help a business or organization complete a project, develop a new life-saving treatment, or do something positive to benefit society.

2. Exposure of Venture Capital Myths

For years, companies seeking funds avoided the tag of “social responsibility,” afraid that investors would avoid any company whose profit objective is compromised by non-financial returns. Nobel Prize-winning economist Milton Friedman ridiculed the idea that business has a “social conscience” and asserted that businessmen who believed such ideas were “unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.” [ii] Consequently, company leaders and investors unwittingly accepted

  • Myth #1 that impact investing produces lower financial returns that take years to materialize. A report by McKinsey & Company in 2018 found that investments in socially beneficial organizations produced returns comparable or exceeding those dedicated to profits only. Furthermore, the median holding period before exit (IPO or M&A) was about the same as conventional VC investments.
  • Myth #2 – An article in the 1998 Harvard Business Review[iii] challenged the belief that VC funding is the underlying force of invention and innovation in economic systems, finding that only a tiny percentage of VC capital (6%) invested in startups or research and development. A VC’s investment focus is on companies that have proven success and need funds for scaling.

Doing Well by Doing Good

Healthcare — where success is measured in improvements in disease progression and quality of life – is the focus of my firm. We promote Impact investing because the strategy provides an avenue in which people can do well by doing good, i.e., buying the securities of companies that positively affect the health of themselves, their families, and others. From the discovery of bacteria to the first artificial organs, significant medical discoveries have extended the quality and length of humans’ lives. Take a look at some of my clients and how they’re positively impacting the world of health and medicine.       

  • EyeMarker: developer of non-invasive assessment and tracking devices for traumatic brain injury (TBI) improving the speed, accuracy, and consistency of concussion detection and diagnosis.  
  • Facible: developer of revolutionary biodiagnostics technology for infectious disease which simplifies the diagnostic testing process while increasing the accuracy of results, empowering patients to better understand their personal health and the quality of products treating their wellness.
  • HealthySole: disrupting the infection prevention market with ultraviolet shoe sanitizer technology clinically proven to kill 99.99% of infections, contaminations, and pathogens in only 8 seconds. 
  • Kurve Therapeutics: provider of compact liquid drug delivery devices significantly enhancing the efficacy and safety of formulations treating Alzheimer’s, Parkinson’s LBD, and ALS. 
  • McGinley Orthopedics: manufacturer of orthopedic surgical devices employing cutting-edge sensing and navigation technology reducing surgical time and cost while improving patient outcomes. 
  • Medical 21: reshaping the future of cardiac bypass surgery with an artificial graft which eliminates the harvesting of blood vessels, significantly decreasing procedure time and cost as well as the risk of infection, scarring, and pain for patients.

The recently updated JOBS Act of 2017[iv] offers founders of healthcare companies an alternative channel for fundraising to running the gauntlet of impersonal VC managers focused solely on extraordinary growth as quickly as possible. Using a Regulation A+ offering in place of venture capital allows company management to target those investors who believe in the company’s objectives and want to support them. For healthcare companies, the potential investors include the

  • doctors who work in the company’s field and know first-hand the impact your solution could have,
  • patients who have been affected and their family members and friends, and
  • people who support the non-profit organizations around those you help diagnose/treat.

Founders of healthcare companies will find a wide variety of investors eager to help them reach their objectives, according to the Global Impact Investing Network 2020 Annual Impact Investor Survey.[v] Their research estimates the current market size at $715 billion, attracting a wide variety of individual and institutional investors:

  • Fund Managers
  • Development finance institutions
  • Diversified financial institutions/banks
  • Private foundations
  • Pension funds and insurance companies
  • Family Offices
  • Individual investors
  • NGOs
  • Religious institutions

Rather than having one or more VC shareholders anxious to make a profit and move on to the next deal, Regulation A+ offers access to thousands of potential advocates – a legitimate community of people with a shared sense of purpose — for your business.

A Reg A+ offering allows investors to contribute to life-saving research, clinical trials, or tools and technology to assist victims in returning to everyday life, possibly within their families. For example, small biotechs are more likely to invest in research, spending up to 60% of their revenue on R&D.[vi] They account for up to 80% of the total pharmaceutical development pipeline in 2018,[vii] making small companies the driving force behind innovative new therapies, and 64% of all new drugs approved by the FDA in 2018 originated from small pharma.

Final Thoughts

Founders seeking new funding should ask, “Do I want a group of shareholders that focus solely on my bottom lines or investors who care about our company’s objectives for the full community – patients as well as shareholders?” The question is especially pertinent since an alternative process is available with less hassle, cost, and time. We believe that Regulation A+ offerings should be in the toolbox of every founder, owner, CFO, and Treasurer in the United States. Their use provides excellent upside potential with little downside risk.



[i] Gregory, N. and Volk, A. (2020) GROWING IMPACT New Insights into the Practice of Impact Investing. International Finance Corporation. (June 2020) Access through

[ii] Friedman, M. (1970) A Friedman doctrine‐- The Social Responsibility Of Business Is to Increase Its ProfitsNew York Times. (September 13, 1970) Accessed through

[iii] Zider, B.(1998) How Venture Capital Works. Harvard Business Review. (November-December, 1998) Access through

[iv] Littman, N. (2021) Healthcare-Focused Impact Investing: Another Way To Invest For Change. Forbes Magazine. (April 28, 2020) Access through

[v] Staff. (2021) WHAT YOU NEED TO KNOW ABOUT IMPACT INVESTING. Global Impact Investing Network. (August 25, 2021) Access through

[vi] Coskun, M. (2020) How is R&D spending affecting Biotech company growth? Data-Driven Investor. (May 11, 2020) Access through

[vii] Kurji, N. (2019) The Future of Pharma: The Role Of Biotech Companies. Forbes Magazine. (May 29, 2019) Access through

KorePartner Spotlight: Scott Pantel, President & CEO of Life Science Intelligence

With the launch of the KoreConX all-in-one platform, KoreConX is happy to feature the partners contributing to its ecosystem. 


During the capital raising journey, many things must be in place to increase the potential for success. One of these critical factors is having the right team to assist with gaining information on your demographic is vital to a successful capital raise.


As the President and CEO of LSI, Scott Pantel knows the importance of this, which is why Life Science Intelligence was formed. Scott knows that the most important and strategic business decisions must be made based on data and insights from trusted advisors. LSI is proud to be the go-to-market research firm to support those making these big decisions because of their experience in the Medtech field. With a team of economists, analysts, and market researchers, LSI provides deep knowledge of the healthcare industry, guiding clients with actionable data to identify significant trends in medical devices, diagnostic, and digital health technologies that are rapidly evolving in the industry.


We took some time to speak with Scott to learn more about him, his company, and his thoughts on the future of market research, advisory, and raising capital.


Q: What does your company do, and how are you making a difference?

A: We’re a Medtech-focused market research and advisory company. We help early-stage companies all the way up to the largest healthcare companies in the world, and their investors, make the best strategic decisions possible. We do this through independent research, consulting, advisory and partnering events.


Q: What excites you about the Medtech, Life Sciences, and Biotech Industries?

A: The thing that excites me most about Medtech is that we get to have an impact on people’s lives. The innovators in our space save lives and reduce suffering. To borrow a quote from our 2020 Keynote Speaker and Co-Founder of Auris Health (acquired by J&J for $5.8B), “Medtech is the best and original impact investment sector.”  The innovators in our sector are literally changing and saving lives.  I also get excited to see that patients are increasingly becoming more involved in their healthcare decisions. The convergence of medical devices, data, and smart technologies improves patient outcomes and is slowly but surely making our healthcare system more efficient. We have a long way to go, but I believe we are on the right track, and we will see some quantum leaps in medical technology over the coming years.  


Q: How do you see the LSI Medtech event impacting your company and industry?

A: This event connects the innovators with the capital sources they need to commercialize life-changing and saving technologies.  Innovations need capital and strategic partners to scale and get to the market.  Our event connects all of the stakeholders in the Medtech ecosystem so that good things can happen and we can get technologies to market faster.


Q: Why do you think education on RegA+ plays such a vital role in expanding access to capital for Medtech companies?

A: Most of the companies we work with are totally unaware of what is available in terms of tapping the private markets and leveraging equity crowdfunding. The market is slowly but surely catching up, and we believe inside of the next 12-18 months, we’ll be seeing a huge uptick of healthcare companies taking advantage of the various Regulations that came from the JOBS Act. Specifically, we believe Reg A+ will see exponential growth within healthcare/Medtech companies.


Q: What impact do you think RegA+ can have on Medtech companies?

A: It is already having a huge impact. Companies are starting to jump in. In the last six months, I’ve personally gotten involved in supporting five Medtech companies that collectively raised over $200M. And it is just beginning – we are at a turning point, and the markets have a huge appetite for impact investment opportunities. This is a perfect setup for CEOs and founders that are running Medtech startups that are building solutions that can save a life or reduce suffering.


Q: What advice would you give a young Medtech entrepreneur as they begin their journey in capital raising and building their company?

A: Do your homework and see if a Regulation A+ capital raise path makes sense for you. Surround yourself with talented people that are committed to your vision. Stay positive and be willing to adjust as you go. 


The Recipe for a Successful RegA+ Offering

If your company is looking to raise funding, you’ve probably considered many options for doing so. Since the SEC introduced the outlines for Regulation A+ in the JOBS Act in 2012 and its subsequent amendments, companies are able to raise amounts up to $75 million during rounds of funding from both accredited and non-accredited investors alike. If you’ve chosen to proceed with a RegA+ offering, you might be familiar with the process, but what do you need for your offering to be a success?

When beginning your offering, your company’s valuation will play a key role in the offering’s success. While it may be tempting to complete your valuation in-house, as it can save your company money in its early stages, seeking a valuation from a third-party firm will ensure its accuracy. Having a proper valuation will allow you to commence your offering without overvaluing what your company is worth, which can be more attractive to investors.

Since the SEC allows RegA+ offerings to be freely advertised, your company will need a realistic 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 that already love your brand will be excited to invest in something that they care about.

After addressing marketing strategies for gaining investments in your company, 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 people 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.

For a successful offering, companies should also keep in mind that they need to properly manage their offering. KoreConX makes it simple for companies to keep track of all aspects of their fundraising with its all-in-one platform. Companies can easily manage their capitalization table as securities are sold and equity is awarded to shareholders, and direct integration with a transfer agent allows certificates to be issued electronically. Even after the round, the platform provides both issuers and investors with support and offers a secondary market for securities purchased from private companies.

Knowing your audience, establishing a marketing budget, creating simple terms, and having an accurate valuation will give your RegA+ 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.

What is Regulation A+?

Regulation A+ (RegA+) was passed into law by the SEC in the JOBS Act, making it possible for companies to raise funding from the general public and not just from accredited investors. Since March 2021, companies have been able to take advantage of the limit’s increase to $75 million. This provides companies the ability to pursue equity crowdfunding without the complexity of regular offerings. So, what investments does RegA+ allow?

Outlined in the act, companies can determine the interest in RegA+ offerings by “testing the waters.” While testing the waters allows investors to express their interest in the offering, it does not obligate them to purchase once the Offering Statement has been qualified by the SEC. Also allowed by the Act, companies can use social media and the internet to both communicate and advertise the securities. However, in all communications, links to the Offering Statement must be provided and must not contain any misleading information.

It is important to understand the two tiers that comprise RegA+. Tier I offerings are limited to a maximum of $20 million and call for coordinated review between the SEC and individual states in which the offering will be available. Companies looking to raise capital through Tier I are required to submit their Offering Statement to both the SEC and any state in which they are looking to sell securities. This was a compromise for those who opposed the preemption that is implemented in Tier II.

For offerings that fall under Tier II, companies can raise up to $75 million from investors. For these offerings, companies must provide the SEC with their offering statement, along with two years of audited financials for review. Before any sales of securities can take place, the SEC must approve the company’s offering statement, but a review by each state is not required. It is also important to note that for Tier II offerings, ongoing disclosure is required unless the number of investors was to fall below 300.

In contrast to typical rounds of fundraising, investors are not required to be accredited, opening the offering up to anyone for purchase. Under Tier I, there are no limits that are placed on the amount a sole person can invest. For unaccredited investors under Tier II, limits are placed on the amount they can invest in offerings. The maximum is placed at ten percent of either their net worth or annual income, whichever amount is greater. To certify their income for investing, unaccredited investors can be self-certified, without being required to submit documentation of their income to the SEC. Additionally, there is no limit placed upon the company as to the number of investors to whom it can sell securities.

Once investors have purchased securities through RegA+ investments, the trading and sale of these securities are not restricted. Only the company that has created the offering can put limits on their resale. This allows investors to use a secondary market for trading these securities.

Through Regulation A+, companies are given massive power to raise funds from anyone looking to invest. With the Act allowing for up to $75 million to be raised, this enables companies to raise capital from a wide range of people, rather than only from accredited investors. With two tiers, companies have the freedom to choose the one that best fits their needs. Regulation A+ and the JOBS Act have the potential to drastically change the investment landscape.

Investing in Startups 101

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

The high-speed world of startups, and the risks of investing in them, are well documented, but startup investing can be complicated and there is a lot of information you should know before making your first investment.

This article will try to answer the question “why should you invest in a startup?” by giving you information about the process and what to expect from investing in an early-stage business.

Why invest in startups?

Through equity crowdfunding, you can support and invest in startups that you are passionate about. This is different than helping a company raise capital via Kickstarter. You aren’t just buying their product or merch. You are buying a piece of that company. When you invest on StartEngine, you own part of that company, whether it’s one you are a loyal customer of, a local business you want to support, or an idea you believe in.

Investing in startups means that you get to support entrepreneurs and be a part of the entrepreneurial community, which can provide its own level of excitement. You also support the economy and job creation: in fact, startups and small businesses account for 64% of new job creation in the US.

In other words, you are funding the future. And by doing so, you may make money on your investment.

But here’s the bad news: 90% of startups fail. With those odds, you’re more than likely to lose the money you invest in a startup.

However, the 10% of startups that do succeed can provide an outsized return on the initial investment. In fact, when VCs invest, they are looking for only a few “home run” investments to make up for the losses that will compose the majority of their portfolio. Even the pros expect a low batting average when investing in startups.

This is why the concept of diversifying your portfolio is important in the context of startup investing. Statistically, the more startup investments you make, the more likely you are to see better returns through your portfolio. Data collected across 10,000 Angellist portfolios supports this idea. In other words, the old piece of advice “don’t put all your eggs in one basket” holds true when investing in startups.

Who can invest in startups?

Traditionally, startup investing was not available to the general public. Only accredited investors had access to startup investment opportunities. Accredited investors are those who:

  • Have made over $200,000 in annual salary for the past two years ($300,000 if combined with a spouse), or
  • Have over $1M in net worth, excluding their primary residence

That meant only an estimated 10% of US households had access to these opportunities. Equity crowdfunding changes all of that and levels the playing field. On platforms like StartEngine, anyone over the age of 18 can invest in early-stage companies.

What are you buying?

The Breakdown of Securities Offered via Reg CF as of December 31, 2020

When you invest in startups, you can invest through different types of securities. Those include:

  • Common stock, the simplest form of equity. Common stock, or shares, give you ownership in a company. The more you buy, the greater the percentage of the company you own. If the company grows in value, what you own is worth more, and if it shrinks, what you own is worth less.
  • Debt, essentially a loan. You, the investor, purchase promissory notes and become the lender. The company then has to pay back your loan within a predetermined time window with interest.
  • Convertible notes, debt that converts into equity. You buy debt from the company and earn interest on that debt until an established maturity date, at which point the debt either converts into equity or is paid back to you in cash.
  • SAFEs, a variation of convertible note. SAFEs offer less protection for investors (in fact, we don’t allow them on StartEngine) and include no provisions about cash payout, so you as an investor are dependent upon the SAFE converting into equity, which may or may not occur at some point in the future.

Most of the companies on StartEngine sell a form of equity, so the rest of this article will largely focus on equity investments.

How can a company become successful if they only raise $X?

Startup funding generally works in funding rounds, meaning that a company raises capital several times over the course of their life span. A company just starting out won’t raise $10M because there’s no indication that it would be a good investment. Why would someone invest $10M in something totally unproven?

Instead, that new company may raise a few hundred thousand dollars in order to develop proof-of-concept, make a few initial hires, acquire their first users, or reach any other significant business developments in order to “unlock” the next round of capital.

In essence, with each growth benchmark a company is able to clear, they are able to raise more money to sustain their growth trajectory. In general, each funding round is bigger than the previous round to meet those goals.

When do companies stop raising money? When their revenue reaches a point where the company becomes profitable enough that they no longer need to raise capital to grow at the speed they want to.

What happens to my equity investment if a company raises more money later?

If you invest in an early funding round of a startup and a year or two later that same company is raising more money, what happens to your investment? If things are going well, you will experience what is known as “dilution.” This is a normal process as long as the company is growing.

The shares you own are still yours, but new shares are issued to new buyers in the next funding round. This means that the number of shares you own is now a smaller percentage of the whole, and this is true for everyone who already holds shares, including the company’s founders.

However, this isn’t a problem in itself. If the company is doing well, in the next funding round, the company will have a higher valuation and possibly a different price per share. This means that while you now own a smaller slice of the total pie, the pie is bigger than what it was before, so your shares are worth more than they were previously too. Everybody wins.

If the company isn’t growing though, it leads to what is known as a down round. A down round is when a company raises more capital but at a lower valuation, which can increase the rate of dilution as well as reduce the value of investors’ holdings

How can I make money off a startup investment?

Traditionally, there are two ways investors can “exit” their investment. The first is through a merger/acquisition. If another company acquires the one you invested in, they will often offer a premium to buy your shares and so secure a controlling ownership percentage in the company. Sometimes your shares will be exchanged at dollar value for shares in the acquiring company.

The other traditional form of an exit is if a company does an initial public offering and becomes one of the ~4,000 publicly trading companies in the US. Then an investor can sell their shares on a national exchange.

Those events can take anywhere from 5-10 years to occur. This creates an important difference between startup investing and investing in companies on the public market: the time horizon is different.

When investing in a public company, you can choose to sell that investment at any time. However, startup investments are illiquid, and you may not be able to exit that investment for years.

However, equity crowdfunding can provide an alternative to both of these options: the shares sold through equity crowdfunding are tradable immediately (for Regulation A+) and after one year (for Regulation Crowdfunding) on alternative trading systems (ATS), if the company chooses to quote its shares on an ATS. This theoretically reduces the risk of that investment as well because the longer an investment is locked up, the greater the chance something unpredictable can happen.


Investing in startups is risky, but it is an exciting way to diversify your portfolio and join an entrepreneur’s journey.