The term “crowdfunding” is in vogue these days and we get asked frequently why we don’t use the term more in our website and other materials. The reality is companies have raised capital from the “crowd” since the early 1980’s under the Regulation D program – thus the term is not describing a new process to the team here at RDR.
Certainly the new 506(c) program has democratized the process considering that small and medium size companies that make up the bulk of issuers under Regulation D can now engage in general advertising and solicitation of the investment offering. The term crowdfunding is being used to describe a process that has, for decades, been available under Regulation D: capitalizing a company or project through the investment of a number of individuals. Granted – the 506(c) general advertising upgrade is a massive advantage and we are staunch proponents of the 506(c) program. Our clients are raising capital more efficiently and successfully with the 506(c) program advantages.
With the apparent demise of Title 3 of the JOBS Act, 506(c) has become the primary and most efficient route for companies seeking to raise capital from the “crowd” and do so with the same promotional capabilities of a public offering.
Interested in raising capital from investors through a 506(c) offering? Call us today to discuss your company or project! (303) 984-4883
Author:
Tuesday August 18, 2015
Category: Capital Formation and Regulation D
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