Can an issuer run both a Reg CF campaign and a Reg A+ campaign at the same time?
Yes, an issuer can run both a Regulation Crowdfunding (Reg CF) campaign and a Regulation A+ (Reg A+) campaign at the same time, as long as they comply with the requirements of both regulations.
Reg CF and Reg A+ are both securities offerings that allow companies to raise capital from the general public. However, there are some key differences between the two regulations, such as the amount of money that can be raised, the disclosure requirements, and the eligibility criteria for issuers.
Under Reg CF, issuers can raise up to $5 million in a 12-month period, and they must file certain disclosures with the SEC and provide ongoing updates to investors. Reg A+, on the other hand, allows issuers to raise up to $75 million in a 12-month period, and they must file an offering statement with the SEC and provide ongoing reports to investors.
Issuers must ensure that they comply with the requirements of both regulations, which may involve preparing separate disclosures and reports for each offering. They must also consider how the two offerings may impact each other, such as how investors in one offering may perceive the risks and opportunities of the other offering.
Overall, running both a Reg CF campaign and a Reg A+ campaign at the same time requires careful planning and compliance with regulatory requirements.
Why would an issuer want to run a Reg CF and Reg A+ campaign at the same time?
An issuer may want to run a Regulation Crowdfunding (Reg CF) campaign and a Regulation A+ (Reg A+) campaign at the same time for a few reasons:
1: Diversification of funding sources: Running both campaigns simultaneously can help an issuer diversify its funding sources and reach a wider pool of investors. Reg CF campaigns are limited to raising up to $5 million per year, while Reg A+ campaigns can raise up to $75 million per year, so an issuer can use both campaigns to attract a range of investors with different investment preferences and capacities.
2: Testing the waters: An issuer may want to run a Reg CF campaign first to gauge investor interest and validate their business model before moving on to a Reg A+ campaign. By doing so, they can test the waters and see if there is sufficient investor demand for their offering before investing more resources into a larger-scale Reg A+ campaign.
3: Different disclosure and reporting requirements: Running both campaigns can allow an issuer to tailor their disclosures and reporting requirements to different investor audiences. Reg CF requires certain disclosures, such as financial statements and information about the issuer's business, while Reg A+ requires more extensive disclosures, such as audited financial statements and ongoing reporting requirements. An issuer may want to provide more detailed information to Reg A+ investors while keeping disclosures more streamlined for Reg CF investors.
4: Strategic planning: An issuer may have a specific strategy in mind for their fundraising efforts that involves running both campaigns at the same time. For example, they may want to target different investor groups with different offerings, or they may want to use Reg CF to drive interest and momentum for a Reg A+ campaign.
Overall, running both a Reg CF and Reg A+ campaign at the same time can provide an issuer with more options and flexibility for their fundraising strategy, but it also requires careful planning and compliance with regulatory requirements.