Is Now the Time to Start Preparation of Your Offering?
Business professionals and fund managers that operated through the 2008-2009 recession remember the feeling of late 2008 with the news awash in stories of bad economic data and the recession seemingly in full swing. Yet – the market began recovery just a few short months later.
Welcome to November 2008. While the introduction of the Covid19 virus has caused some serious business and market disruptions – we feel the negative impacts from this virus will be relatively short lived and thus opportunities to capitalize on opportunities will entail a shorter time frame window than the 2008-2009 recession.
Two key points to consider when planning a capital raise for the balance of 2020:
1. Preparation and Syndication Timeframes: The timeframe to prepare the offering and engage in syndication of capital may take longer than expected. A Regulation A+ offering takes approximately 3-4 months for Form 1-A offering circular preparation and SEC submission and qualification. Now add another several months to execute promotion of the offering and on-boarding capital and you are quickly looking at late summer to early fall for deploying such capital.
A Regulation D based offering will typically require a 4-6 week preparation process and factor in several more months for capital aggregation and you are now looking at late summer to deploy such capital.
Our advice? We suggest business owners and fund managers look past the next several months and focus on the market dynamics that will be in place late Summer and Fall 2020 and plan accordingly in terms of getting your offering preparation engaged. The impacts from this virus will be quickly fading as we reach late Summer 2020.
2. Investor Liquidity: As in 2008-2009 – investors have liquidated significant capital from the public markets. This will greatly benefit private placement offerings and alternative investments executed under Regulation D or Regulation A+ as potential investors will be sitting with very high levels of cash investment liquidity that will be available for new opportunities. We expect those liquidity levels to remain high through 2020.
Interested in executing a Regulation A+ or Regulation D offering? Have questions about timing or the process? Call us today to discuss your planned capital raise: (303) 984-4883.
Wednesday April 29, 2020
Category: Capital Formation and Regulation D
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