Drizzling on the Reg A+ Parade

With apologies for sounding like Debbie Downer when all are excited, we’re going to see promoters of the stillborn Title III crowdfunding industry flock to and reshape their business plans for Reg A+, if for no other reason than that federal Tiltle III crowdfunding is never going to get off the ground.

But here’s why the earliest stages of startup financing, for some time to come, are going to continue to evolve within today’s 506(b)/(c) “accredited crowdfunding” parameters: Reg A+ will require of the issuer

*a disclosure document for regulator review,

*reviewed or audited financial statements, and

*ongoing periodic reporting.

A startup need not provide any of the above to raise seed funds from a local angel group. Nor would you post anything like the above to raise funds from accredited investors on AngelList or FundersClub.

Slide decks, high level budgets, and series seed purchase docs with a disclosure schedule are not going to cut it for Reg A+. But these industry standard practices are just fine for offerings seeking exemption under Reg D 506(b) and (c).

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