latest news from
Regulation D Resources

Martin Luther King Holiday Schedule

We will be closed on Monday, January 17th, 2022 in observance of the Martin Luther King holiday. We will re-open Tuesday, January 18th at 9am MST.

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Friday January 14, 2022

Category: Corporate News

Merry Christmas and Happy New Year! Our Holiday Schedule

Merry Christmas and Happy New Year Everyone!

Our offices will be closed Wed., December 22nd at 1pm MST through Friday, December 24th.  We will re-open at 9am MST Monday, December 27th.

For the New Year Holiday – our offices will be closed December 31st.

We hope everyone has a safe and happy holiday season!

 

 

 

Author:

Tuesday December 21, 2021

Category: Corporate News

Amended Regulation CF and Regulation D Services Fees – Effective November 26th, 2021

Please note we will be instituting an amended fee schedule for the following services effective on 2pm MST on Friday, November 26th, 2021:

Regulation CF Offering Preparation Services Fee:  total fee of $10,000.00 paid $5,000 as an engagement fee and the balance due 30 days net.

Regulation D Offering Preparation Services Fee: total fee of $8,000.00 paid $5,000 as an engagement fee and the balance due 30 days net.

Interested in preparing a Regulation D or CF offering?  Call us today to discuss!  (720) 586-8610.

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Tuesday November 23, 2021

Category: Corporate News

Veterans Day – Office Closing

Our offices will be closed November 11, 2021 in observance of Veterans Day.

We will re-open Friday, November 12 at 9am MST.

 

Author:

Thursday November 11, 2021

Category: Corporate News

Direct Regulation CF Services Have Launched!

Our Direct Regulation CF Services have Launched! Execute a Direct Reg CF at 1/3 the cost of the traditional CF platforms. Call today for more information: (720) 586-8610.

1_3 the Cost - Reg CF

Author:

Thursday September 09, 2021

Category: Capital Formation and Regulation D

RDR Offices Closed for Labor Day Sept. 6th, 2021

Our offices will be closed Monday, Sept. 6th in observance of Labor Day. We hope everyone has a safe and happy holiday weekend!

We will re-open for business Tuesday, Sept. 7th at 9am MST.

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Friday September 03, 2021

Category: Corporate News

Regulation A+ and Real Estate Funds

The streamlining of the old Regulation A program into Regulation A+ has been a game changer for companies seeking a sophisticated vehicle to generally solicit the public for investment and raise funding from all investors (accredited and non-accredited).

Regulation A+ has been especially popular with real estate fund sponsors.  Following are a few reasons why real estate sponsors are choosing Regulation A+ for executing syndications:

1.  Lower Audit Costs for Preparation:  Since most real estate funds execute as newly formed special purpose LLC’s or LP’s – the Tier 2 Regulation A+ audit requirement is applicable to the opening balance sheet only for that entity.  Most newly formed entities will have little to no financial activity so the audit cost is minimal (typically under $1,500).

2.  Real Estate is An Asset Class with Broad Appeal:  Real estate funds tend to do well syndicating capital in the public domain because the asset class in general is something average investors can understand and are comfortable with the investment exposure.

3.  The Nominal Cost and Timeframe Differences from Regulation D Provides a Much Better Syndication Vehicle:  Regulation A+ offerings do require nominally more time and expense to prepare and make ready for execution.  With that said – most real estate fund sponsors are not under purchase contract timelines since the funds are executing as a blind pool vehicle.  Further, since most real estate funds are raising larger amounts of capital – the Regulation A+ offering will provide substantially higher capabilities for successfully syndicating capital than a Regulation D offering.

Interested in Regulation A+?  Call us today to discuss!  (720) 586-8610.

Author:

Thursday August 19, 2021

Category: Capital Formation and Regulation D

“Direct” Regulation CF Crowdfunding Offering Preparation Services – Launching Late August 2021

Regulation D Resources is excited to announce the planned launch of a new service:  “Direct” Regulation CF Crowdfunding Offering Preparation Services.

What is a “Direct” Reg CF and why is it different than a traditional Reg CF offering?

The original Reg CF rules required that all Reg CF offerings execute through an SEC approved Reg CF Platform. While there were many of these platforms that materialized, they tend to be very expensive to utilize (8-11% commissions and 2-3% equity along with CF preparation and Form C preparation and filing fees).

A “Direct” CF offering takes advantage of a rule change that allows approved broker dealer intermediaries to engage in administration of a Reg CF offering.  This allows the CF Issuer to bypass the expensive Reg CF platforms and execute “direct” using a broker dealer managed website portal for executing the securities sales.

The benefit of a “Direct” Reg CF Offering using our services is execution fees and commissions that are 1/3 the cost of using a traditional Reg CF Platform while maintaining a fully SEC compliant sales process.  With a Direct Reg CF – the associated broker dealer commissions of 3% and 1% warrants for equity (calculated only on funds raised) are a fraction of what traditional Reg CF platforms charge. Further, issuers will have their own dedicated CF website portal and are not sending their investor prospects to a traditional portal with hundreds of other investment opportunities.

Regulation D Resources Reg CF Services will include:

– Reg CF Offering structuring guidance
– SEC Form C Filing and Offering Circular Drafting
– SEC Form C EDGAR Conversion and SEC submission
– Investor Engagement Page website build
– Technology coordination with the FINRA Broker dealer and transfer agent compliance management and subscription processing system that will host the Reg CF offering and process subscriptions.  
Fees:  Regulation D Resources Reg CF Offering Preparation fee will be a flat fee of $7,000 and the technology platform setup fee will be $3,500 (payable to third party transfer agent platform integrated with the broker dealer).  Monthly execution fees for the technology platform are $550 a month during the term of the offering (paid to the transfer agent technology provider).

With the enhanced Reg CF cap of $5,000,000 and the ability to generally solicit the public and accommodate investment from accredited and non-accredited investors – the “Direct” Reg CF approach will be a perfect fit for many companies seeking to execute under Reg CF but wanting to avoid the high costs of a traditional CF platform offering.

Our Direct Reg CF Services are slated for retail launch in late August 2021.  Interested in executing a “Direct” Reg CF offering?  Call us today to discuss!  (720) 586-8616.

Author:

Wednesday August 04, 2021

Category: Corporate News

The Critical Error Many Sponsors Make on Fund Management Fees

Real estate funds tend to have multiple fees that are paid to the Fund Manager. A typical real estate fund fee structure would include, but not be limited to, Fund Management Fees, Asset Acquisition Fees, Asset Disposition Fees, and Construction Management Fees.

One permutation of the Fund Management Fee structure we have seen in real estate funds before is where the Fund Management Fee has a deduction for general and administrative (“G&A”) expenses for operating the Fund entity.  We have seen (on fund vehicles prepared outside our firm) where this arrangement has created serious issues for the Fund Manager as the Fund’s portfolio growth requires more infrastructure to operate and thus the G&A expenses rise in conjunction with such expansion.  The issue is most Fund Management Fees are fixed and thus, as the G&A expenses rise, the Fund Manager realizes less net from the Fund Management Fee.  We have seen instances where almost the entire Fund Management Fee was being used to cover G&A expenses.

In our opinion – the Fund Management Fee is compensation to the Fund Manager and, as such, should not be used to cover G&A expenses for the Fund’s operations.

Interested in executing a Regulation D or Regulation A+ Offering to syndicate capital?  Call us today to discuss!  (720) 586-8610

Author:

Tuesday June 22, 2021

Category: Capital Formation and Regulation D

The Exorbitant Costs of Regulation CF “Crowdfunding” Capital and the New “Direct CF” Option

Regulation CF, commonly referred to as “crowdfunding”, recently saw a rule change that increased the annual capital limit to $5,000,000. While many companies may entertain executing a Reg CF to raise funding – Issuers should be aware that executing a Reg CF using the traditional platform model carries with it exorbitant offering expenses and commissions.  Based on recent changes in the SEC rules – there is now a lower cost option for executing a Reg CF – a “Direct CF”.

Reg CF sales must execute through either; (a) an SEC approved and broker dealer managed Reg CF Portal Platform or; (b) through an approved SEC intermediary (a FINRA broker dealer).  The traditional portals typically charge between 8-10% on all capital raised by the Issuer through the Reg CF offering (and that commission does not include offering preparation expenses). Direct sales from the Issuer to investors are not allowed under Reg CF.  Thus, even though the Issuer may execute a marketing campaign to their social media base or to the public – any investor leads they generate for the Reg CF Offering must be sent to the CF portal wherein they will be subject to the commissions charged. So – not only does the Issuer have marketing costs for the offering but all sales will be subject to the portal commission. An Issuer raising $4,000,000, for example, and using the old traditional CF platforms, could easily see the overall commissions and expenses for such capital exceed $400,000-$500,000.

 

The “Direct CF” model involves bypassing the traditional platforms and executing using a single broker dealer hosted and managed platform that is unique to the Issuer for processing the CF securities sales.  The benefit?  The commissions are approximately 3% and total execution costs can be 1/4th the cost of using a traditional platform.

Interested in learning more about a Direct CF Offering?  Call us today to discuss:  (720) 586-8610.

Author:

Monday April 26, 2021

Category: Capital Formation and Regulation D

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