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.

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.

The Medtech A+ Team: An Upcoming KoreSummit Event

KoreConX is excited for the upcoming KoreSummit event on Thursday, June 23rd. Our second event focused on the Medtech vertical, Thursday is a half-day event that dives into how Medtech companies can conduct a successful RegA+ offering. Kicking off at 1 PM EST, we’re excited for our KorePartners to join us in covering this exciting topic. Let’s dive into the schedule more below.


At 1 PM EST, KoreConX CEO Oscar Jofre will introduce the event with a warm welcome. The first panel at 1:10 PM will begin with an introduction to Reg A+ for a MedTech company. This opening panel features Oscar Jofre, Scot Pantel, and Stephen Brock.


Up next at 1:40 PM, five experts will take the virtual stage to talk about the preparation phase including what a Form 1A is and the regulatory requirements you need to complete the filing. Douglas Rurak, Matthew McNamara, Peter Danyeko, Nick Antaki, and Shari Noonan will be speaking on this panel. 


At 2:15 PM, the third panel kicks off with a discussion about going live. This panel will cover everything you need to know when preparing your live offering to ensure it is a success and will feature Kiran Gramiella, Shari Noonan, John Hayes, and broker-dealer Amanda Grange. From investor acquisition and issuance tech to broker-dealers, this panel will ensure participants will be prepared for their next capital raise.


The fourth panel takes place at 3:00 PM and is about how, when raising capital, it is vital to sell your company’s story, not just the stock. By learning how to tell a story, MedTech companies looking to raise capital will be able to connect with investors on a personal level and have a much better chance of success. Panelists will include Scott Pantel, Andy Angelos, John Hayes, Andrew Corn, and Dawson Russell sharing their wealth of experience on this topic.


At 3:40 PM, the 5th panel discusses the importance of a secondary ATS, what it is, and how to pick one that will best suit your needs. Lee Saba, Kiran Garimella, and Peter Danyeko will discuss their experience with ATSs and help you understand why having one is so important. 


The event concludes with the final panel at 4:00 PM with a short panel that covers takeaways from the event as well as allows for networking. With this panel, we hope to give event attendees the chance to meet and greet the KoreConX ecosystem of partners, members, and service providers that work with Reg A+ daily. This will include Oscar Jofre, Scot Pantel, Joel Steinmetz, Matthew McNamara, Douglas Ruark, and Stephen Brock.


Join us for MedTech A+ Team: How to do a successful Reg A+ for a MedTech company on Thursday, June 23rd, 2022. This event is online and free to attend, which you can register for here. This event is perfect for all MedTech companies that are new or unfamiliar with Reg A+ and those that have completed Reg A+ raises in the past.