New companies typically need an influx of cash to ensure they continue running properly. There are two ways in which a company can obtain the necessary funding, through public or private investments.
Private investors can acquire a large stake in a company, which is seen as risky by most business owners. Public investments are a better option.
There are many ways for a company to open itself up to public investors. Choosing to fund your business through Regulation A+ shares can be a great way to obtain the capital you need.
1. No IPO is Required
In the past, companies would have to file a formalized IPO through the Securities and Exchange Commission (SEC) and then launch their shares on the stock market to obtain public funding.
The introduction of Regulation A+ shares allows smaller companies to avoid the expense of a formalized IPO.
A company still has to file with the SEC and obtain approval before selling Regulation A+ shares, but the restrictions and filing fees are significantly less than those associated with a formalized IPO.
2. All Investors are Eligible
When your company needs capital, you want to ensure that as many investors as possible have the opportunity to purchase shares in your company.
Traditional methods of public funding have limited the types of investors a company can accept. Only accredited investors are able to purchase shares through the stock exchange.
With Regulation A+ shares, both accredited and nonaccredited investors are free to buy and sell a company's shares. This ensures that you will be able to maximize your fundraising efforts.
3. Shares are Extremely Liquid
Regulation A+ shares have the unique ability to be bought and sold with ease. Investors are free to sell any Regulation A+ shares immediately without incurring any penalties.
When compared to the minimum holding periods required when investing in other types of shares, Regulation A+ shares are much more liquid. This liquidity can attract investors that might not be interested in your company otherwise.
If you need to raise additional capital for your company, taking on investors is a viable option. Public investments through Regulation A+ shares can be a significant benefit to your company.
You will enjoy the influx of funds and retained control associated with public investments without having to go through the formalized IPO registration process when you choose to fund your business through Regulation A+ shares in the future. If you have more questions, or are interested in buying and selling regulation A+ shares, contact a local company.