New Regulation A+ Rules Expand Inexpensive Capital Formation of Up to $50 Million
Many in the investment and crowdfunding community had eagerly been waiting for the Securities and Exchange Commission (SEC) to release rules to enact the provisions of Title IV of the JOBS Act. The SEC finally released its regulations in March of this year. The new rules contained a partial preemption of state securities laws which surprised many. Title IV told the SEC to liberalize the provisions of Regulation A which is an exemption to allow smaller companies to sell private securities up to an amount of $5 million. It represents a huge step forward for crowdfunding.
The tides of today’s corporate finance are shifting quickly. Traditional methods for business funding are being morphed and replaced by new and sexy alternatives. But, as often is the case, it’s sometimes best to make new friends and keep the old. Older tried and tested options for raising capital are often still overlooked in the haste to chase the latest small business funding fad. And while the sexiness of financing methods like crowdfunding and crowdlending are receiving a great deal of press at the moment, other alternative financing methods still weigh-in heavily as an option for raising capital for both existing and startup businesses including reverse mergers and direct public offerings (DPOs).
Here’s Why Chasing Venture Capital is a Waste of Time
If you ask anyone who’s been there, raising capital is a difficult and altogether time-consuming process. For some, it can even wind-up wholly unfruitful. For the successful, it can still mean hours of effort and money spent in travel, pitching and hob-knobbing. Those who’ve done it, almost all wish they could have their time back. Fundraising can be a period of dark pessimism where the would-be, but persistent entrepreneur truly has a chance to test and see if s/he has what it takes to last the day. In chasing venture capital in 2014, there are a few ways in which I believe venture capital may have outlived its usefulness as a sexy asset-class.