latest news from
Regulation D Resources

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


Thursday September 09, 2021

Category: Capital Formation and Regulation D

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.


Thursday August 19, 2021

Category: Capital Formation and Regulation D

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


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.


Monday April 26, 2021

Category: Capital Formation and Regulation D

Three Issues with Regulation A+ Tier One Offerings and Un-Audited Financials

We interact with many issuers each year that contemplate using Tier 1 Regulation A+ with the sole reason of avoiding the audited financials requirement of a Tier 2 Regulation A+ offering.  While we can see on the surface this may appear to be an advantage and potential cost savings for the issuer – the reality is using Tier 1 to avoid audited financials will probably not lower your offering preparation expenses and can hinder your capital syndication efforts.

Here are three reasons why the “advantage” of not being required to have audited financials and using Tier 1 Regulation A+ will probably hamper your fundraising efforts and probably cost more than the financial audit for a Tier 2 (which would then allow sales in all 50 States without qualification at the State level):

1.  The Cost Savings are a Mirage:

Tier 1 Regulation A+ does not require audited financials however it does require you to qualify the offering not only with the SEC but also with the State regulators in each State that you offer and sell securities. Many States, under the State level rules they will qualify your offering under, will require audited financials as part of the regulatory code and approval process.  Thus, in many cases you will be required to have audited financials anywaybecause there is a good chance the State rules where you offer and sell will require them.

Furthermore, the cost to pay a firm to qualify your Tier 1 in even a few States will probably exceed the original audit cost and that financial audit would have allowed use of Tier 2 Regulation A+ and 50 State sales after SEC qualification.

2.  The Real Benefit of Regulation A+ is Broad Market and Sales to All Investors:

The reason most companies opt for Regulation A+ is the ability to sell nationwide and to ALL investors, not just accredited investors.  By choosing Tier 1 Regulation A+ you will be limiting your offering to sales in only a handful of States and require additional work and effort to qualify in each State.

Tier 1’s State qualification requirement will nullify the largest benefit of a Regulation A+ offering – the ability to go nationwide and sell efficiently in all 50 States.

3.  Best Practice Policy Would Dictate Having Audited Financials

If you are raising funding from investors using a sophisticated offering such as a Regulation A+ – then best practice would dictate that you are executing audited financials anyway to protect the company, principals, and investors.  Furthermore, having audited financials will most certainly increase investor confidence and trust in the company both prior to and after investment.

Interested in executing a Regulation A+ offering?  Call us today to discuss – (720) 586-8610.


Monday April 19, 2021

Category: Capital Formation and Regulation D

Three Ways to Promote your Regulation D 506(c) Offering

Regulation D 506(c) offerings provide the issuer company with the capability to engage in general solicitation and advertising of the offering and investment opportunity to the public with the qualification that all investors are accredited, provide suitable verification, and that the appropriate legends are deployed in promotional materials.

Here are three ways a Regulation D 506(c) Offering can be promoted to the public:

1.  Press Releases:  A press release is an excellent method of letting the general public know you have an offering in place and an investment opportunity available.  Further, a press release also “seeds” search engines with additional results on the company and the securities offering for when investor prospects research your company.

2.  Social Media Promotion:  Leverage your social media sphere of influence by promoting your offering to those groups.  Many companies that execute a 506(c) offering will have deep social media assets that can be leveraged to gain investor prospects including Linkedin, Facebook, and other social media platforms.

3.  Corporate Website Promotion:  Many companies executing 506(c) offerings will have corporate websites that are attracting thousands if not tens of thousands of visitors each month.  The company’s corporate website can then be used to notify visitors that an investment opportunity is available and direct them on how to evaluate the offering and determine if they qualify to invest.

Most modern securities offerings that allow general advertising, like a Regulation D 506(c), are being administrated using technology.  Using an investor web portal, like the Regulation D Resources Investor Web Portal, to engage your prospects and track them through the investment subscription process is an invaluable tool.

Interested in raising capital via a Regulation D 506(c) offering?  Call us today to discuss: (720) 586-8610.


Wednesday March 03, 2021

Category: Capital Formation and Regulation D

Raising Funding to Capitalize on the 2021 US Economic Recovery

As we leave 2020 in the rear view mirror we look ahead to 2021 with hopes that we can see a return to normalcy within our business environment.

The combination of record financial stimulus, COVID vaccine dissemination, and a re-opening of state level economies should breathe some life back into the US economy.  While we may see some lingering impacts through mid 2021 our expectation is that the second half of the fiscal year 2021 should start resembling a normal economy again for most industries.

Business executives should be planning ahead for the process of raising funding for expansion or for business opportunities.  Preparing a Regulation D based offering can take 30-60 days depending on the complexity of the company’s operations and the efficiency of the client in providing needed information.  While Regulation D based offerings can be executed fairly quickly and without an SEC qualification process – they do have limitations the primary one being that a 506c based offering can only be sold to accredited investors.

Regulation A+ is a fantastic vehicle for raising funding for many companies.  A company that wants to execute an offering to more closely mimics the promotion benefits of a true public offering should strongly consider Regulation A+ Tier 2 as an option.  The key with Reg A+ is “plan ahead”.  The offering preparation process and SEC qualification can typically take 5 months from start to finish so issuers investigating using Reg A+ should factor in a longer lead time to prepare such an offering for securities sales.

Questions about executing a Regulation D or Regulation A+ offering?  Call us today at (720) 586-8616.





Thursday January 14, 2021

Category: Capital Formation and Regulation D

SEC Updates Accredited Investor Definition

The SEC has passed a rule change that updates the definition of an “Accredited Investor”.

The changes are intended to update the definition to identify more effectively investors that have sufficient knowledge and expertise to participate in investment opportunities that do not have the rigorous disclosure and procedural requirements, and related investor protections, provided by registration under the Securities Act of 1933.

Specifically, the amendments have added new categories of natural persons that may qualify as accredited investors based on certain professional certifications or designations or other credentials or their status as a private fund’s “knowledgeable employee,” expand the list of entities that may qualify as accredited investors, add entities owning $5 million in investments, add family offices with at least $5 million in assets under management and their family clients, and add the term “spousal equivalent” to the definition.

The SEC release can be viewed here:


Wednesday September 09, 2020

Category: Capital Formation and Regulation D

Non-Accredited Investors – The Untapped Capital Resource

Non-Accredited Investors – The Untapped Capital Resource

The process for raising capital effectively under Regulation D certainly became easier with the advent of 506(c) and the ability to engage in general advertising and solicitation of the offering.  However, 506(c) offerings are limited to accredited investors only – thus 95%+ of the investing public is not available for investment into that type of offering.

While many people will assume that non-accredited investors would only invest small amounts – the reality is many non-accredited investors can easily invest $25,000+ in a single subscription.  Consider a married couple making $280,000 combined income and have a $750,000 net worth – technically they are non-accredited by SEC Regulation D Rule 501 standards.

Enter Regulation A+.  Interested in retaining the capability to engage in public advertising and solicitation of your offering – but don’t want to be limited to only accredited investors?  Regulation A+ provides the perfect solution for executing a straightforward and cost effective offering that allows for both public solicitation of the offering and the ability to accommodate all investors – accredited and non-accredited.

While a Regulation A+ offering is nominally more expensive to prepare (due to the submittal and SEC qualification process) and requires about 2-3 months longer than preparation of a Regulation D based offering – the Regulation A+ program definitely provides the issuer with a more effective and sophisticated offering that maximizes the potential for success.

Why ignore 95%+ of the investing public for your capital raise?  Executing a Regulation A+ offering provides you a true “mini IPO” in terms of promotional capabilities and access to investors.  The program is open to companies operating in a plethora of industries including real estate, technology, energy, manufacturing, and more.

Interested in reaching the next level for your capital raise?  Want a more sophisticated and effective offering than a Regulation D based offering? Call us today to find out more about the Regulation A+ program and how it can benefit you in aggregating investor capital for your business or project – (303) 984-4883.


Monday June 01, 2020

Category: Capital Formation and Regulation D

Are You Capitalized for the Recovery and Subsequent Opportunities?

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

Advantages and Disadvantages of Regulation D Offerings vs. Regulation A+ Offerings

The two primary exemptions that most companies use to sell securities are Regulation D and Regulation A+.  Listed below are the advantages and disadvantages of Regulation D based offerings and Regulation A+ based offerings:

Regulation A+ Offering Program


– Allows sales to accredited and non-accredited investors
– Public solicitation and general advertising allowed
– Tier 2 Offerings (most commonly used) are federally covered securities and not subject to State qualification
– Securities sold are freely trading immediately


– More complex preparation process than a Reg D since the Form 1-A offering circular and offering have to be reviewed and approved by the SEC (usually 3-5 months)
– Basic annual and semi-annual reporting to SEC (can opt out of this requirement if you have less than 300 shareholders).  The reports are fairly simplistic and not the same level of detail as required of a fully reporting company. Our firm will offer services for semi-annual and annual reports.
– Audited financials required – however for start-up or special purpose entities (real estate funds, oil and gas funds, single asset acquisitions, etc.) the only financial statement available and required for audit is the balance sheet.
– Due to the additional time and effort to obtain qualification from the SEC for the offering – the preparation cost for the offering is higher than a Reg D.

Regulation D Offering Program


– 506(c) Program allows public solicitation and general advertising (accredited investors only)
– Streamlined preparation process since the offering is not submitted for SEC approval
– 506 based offerings are federally covered securities and not subject to State qualification or rules
– No audited financials required for 506 based offerings sold only to accredited investors
– No on-going reporting after close of the offering
– Lower costs for preparation as compared to a Reg A+


– Securities sold are not freely trading immediately and are subject to the Rule 144 restrictions
– Limited capability for sales to non-accredited investors and sales to non-accredited investors eliminates the capability to use 506(c) and generally solicit the public for investors
– Audited financials required if selling to non-accredited under a 506(b)

We will have many clients opting to mitigate the preparation time disadvantage of Regulation A+ but starting an offering using 506(c) and transitioning into a Reg A+ once the Reg A+ is qualified.  This allows the benefit of starting fund raising activities within 4-6 weeks from onset of offering preparation and still deriving the benefits of a Reg A+ several months later as the Reg A+ is ultimately qualified and approved.

Questions about Reg A+ or our Regulation D services?  Please call us at (303) 984-4883 for more information.


Friday January 31, 2020

Category: Capital Formation and Regulation D

Fee Increase – Investor Web Portal Application

Please note effective June 27, 2017 we have increased the fee for the portal application for non-RDR offering preparation clients to $5,000.  This is for a standalone portal for a non Regulation D Resources offering preparation client (a client just using the portal application technology and not our offering preparation services).

Offering Preparation clients of RDR are still provided access to the investor portal application for a $3,000 build fee.


Tuesday June 27, 2017

Category: Capital Formation and Regulation D

Real Estate Top Volume Sector – Private Placement Fundings For First Quarter 2017

Regulation D Resources (“RDR”) is excited to announce our Private Placement Market commentary for the first quarter of 2017.


Sector Information

Real estate led the way in the first quarter of 2017 as the top volume sector for execution and funding of private placements through RDR.  Prime sectors were multi-family acquisitions including value-add opportunities and Class A properties.  Senior care facilities and mixed-use residential/retail type developments were also high volume real estate sectors in early 2017.

While the heady days of single family value-add and “rehab and flip” type opportunities are getting more crowded in terms of competition – we still saw healthy volume in operators seeking to raise and deploy capital for these types of offerings.  Many of these operators focus on soon to be gentrified areas in urban centers or deploy capital into suburban areas in the path of growth.

Fossil fuel related offerings remained steady in terms of volume and are the second highest grossing volume sector executing private placement offerings.  With energy prices stabilizing over the last 16 months we have seen more normalized activity in the energy sector regarding execution of private placement offerings.  52% of fossil fuel offerings were acquiring existing production and 48% were either development or a mix of acquisition and development.

Technology related offerings were third in volume with a wide array of technology based opportunities that executed offerings through RDR in early 2017.


Offering Statistics

Equity offerings account for approximately 85% of executed offerings and 90%+ of RDR clients are executing under the 506(c) exemption allowing general advertising of the offering.  A significant majority of clients are also supporting the offering with the deployment of an RDR Investor Portal website to manage promotion and compliance processes.

The average offering range is between $2,000,000 and $25,000,000 and the average minimum subscription amount is between $10,000 and $25,000 per investor.


Interested in executing a Regulation D offering to raise capital?  Call us today to find out what we can do to help you Capitalize Your Vision!  (303) 984-4883


Tuesday May 16, 2017

Category: Capital Formation and Regulation D

Three Reasons You Should Be Using a Regulation D Resources Investor Portal to Support your 506(c) Offering

Executing a 506(c) based offering?  Here are three reasons why you should be using a Regulation D Resources Investor Portal to support your 506(c) Offering:

(1) Dedicated Web Presence

A key component to effective marketing of a 506(c) based offering is the ability to drive investor prospect traffic to a dedicated front-side portal to engage them successfully.  The ability to have a custom front-end website that can provide key details about the company and investment opportunity and generate interest in learning more is critical to properly converting investor prospect traffic.


(2) Providing all Investment Vetting, Subscription and Compliance Processes Online

Of all the feedback we receive on our investor portals – one of the primary we hear most often is that the portal “built confidence with investor prospects”.  Using a high technology tool like an investor web portal to support your offering and manage interactions and processes with investors can dramatically enhance the prospects confidence in your company.  You only get one chance to make a solid and professional first impression with investor prospects – and using an investor portal speaks volumes to prospects about your company’s commitment to them as investors and your dedication to executing the offering in a compliant manner.

Further, having a portal that is tracking all investor actions, managing all documentation, and managing investor verifications provides the comfort of knowing you have compliant and accurate securities sales being executed.


(3)  Offering Administrative Management

Managing an offering can be time consuming.  One of the major benefits of an investor portal is the ability to manage and track all processes, all users, documents, and tasks.  The RDR Investor Portal provides significant capabilities in the management of users, communicating with prospects and investors users, managing tasks, and keeping investors updated with timely investor relations updates and notifications.

When we developed the admin side of our portal – we did so with the knowledge that many of our clients have multiple businesses they are operating an time is valuable.  The ability to login as an admin and instantly access a real time offering task list was critical.  The mobile friendly aspect of our portals also ensures that clients can stay ahead of tasks and interactions on the go.


Executing or planning execution of a 506(c) offering?  You should strongly consider deploying an RDR investor portal website to support the offering and increase you capability for success.


Tuesday April 25, 2017

Category: Capital Formation and Regulation D

Is Now the Time for an Oil and Gas Offering?


The oil and gas sector has been through a rough year in 2015 with a significant drop in the price of oil.  The oil and gas market is, however, cyclical and many professionals in the sector are starting to feel the time is near for deploying investment funds into oil and gas assets. The oil market is currently in the midst of its most bearish down cycle in decades. That said, while times are clearly tough right now, there do appear to be better days ahead for the commodity. The current price of oil is too low to sustain production levels nor to meet growing worldwide demand.

In the United States, domestic production has nearly doubled over the last several years, creating a situation where oil imports need to find another home. Saudi, Nigerian and Algerian oil that once was sold in the United States is suddenly competing for Asian markets, and the producers are forced to drop prices. Canadian and Iraqi oil production and exports are rising year after year. The Russians have managed to keep pumping despite inherent economic issues.

There are signs, however, that production is falling in the United States and some other oil-producing countries because of the drop in exploration investments. Production needs to drop in order for prices to recover. In addition to production reductions, demand will need to stabilize or increase to assist in recovery. A potential recession in 2016 could provide the “reset” needed for economic expansion to begin anew assisting a rise in prices.

There are a number of independent oil and gas producers that are in distressed situations and oil and gas assets can be purchased at a fraction of value from 2013 and 2014 valuations.  Operators with liquid investment capital are able to deploy that capital in the coming quarters with the knowledge they are purchasing assets at well below recent historical valuations.  Many operators may even seek long term asset strategies where they purchase assets at fraction of value to only cap those assets until the price of oil returns to a more normalized market price.

Interested in raising capital for oil and gas assets? Now may be the time to be opportunistic in raising capital to purchase undervalued and distressed oil and gas production assets.

Access the capital markets for your energy company with a Regulation D Resources prepared 506(c) exempt public offering. Call us today! (303) 984-4883



Friday March 11, 2016

Category: Capital Formation and Regulation D

Crowdfunding with 506(c)

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




Tuesday August 18, 2015

Category: Capital Formation and Regulation D

Sector Update: BioTechnology

Biotechnology companies are frequent issuers under the Regulation D program. Biotech offerings tend to be executed for earlier stage companies and are usually equity based offerings. Convertible preferred equity is a favored structure with biotech operators although the development and approval lead time for products means little revenue generation in early years so preference returns are typically paid later in the investment term.

Challenges for these offerings are related to forward execution risks for product development and related government approvals. The prospectus development can also be challenging as the prospectus should allow the average potential investor the capability to fully understand the company’s planned operations. Highly technical data and verbiage thus needs to be reformatted and explained properly so investors without biotechnology backgrounds can understand the concepts and the relevant forward plans of the company.

Serious about raising capital effectively for your company? Call us today to discuss becoming a client of Regulation D Resources. (303) 984-4883.


Friday May 22, 2015

Category: Capital Formation and Regulation D

QuickTip: Use Your Website to Deliver Potential Investors

Many issuers under Regulation D are mature operating companies with corporate website assets that see a significant number of visitors each day. With 506(c) these visitors can be solicited for introduction to the issuers 506(c) offering.  Most companies are still controlling access to the Private Placement Memorandum (“PPM”) until they have ascertained the accredited status of an interested party. This can be done by requiring information and contact from an interested investor prior to providing either an electronic copy of the PPM, an online flip book version, or a mailed print version of the PPM.

Many issuers have special sections of their website developed to provide potential investors some basic information on the company’s forward plans, the offering, and a contact method to inquire regarding delivery of the PPM document. Corporate websites and social media campaigns are assets that should play an integral part of a properly executed promotion strategy for a 506(c) offering.

Interested in the 506(c) program?  Call us today to discuss your company’s capitalization needs:  (303) 984-4883.


Monday March 23, 2015

Category: Capital Formation and Regulation D

Record Year Projected for Private Capital Raised Under Regulation D

Regulation D Resources (“RDR”) is excited to announce the culmination of a record year for our company and our clients. With 45 days left in the year, it is the projection of RDR management that the SEC Regulation D program will see its best year to date for capital raised under the Federal Regulation D exemption. This is based on our internal execution data and data from outside sources in the broker-dealer community and FINRA.

Despite a tepid economy – the new 506(c) program is providing tremendous benefits to companies seeking to raise capital from investors via a Regulation D private placement offering. The new program provides the promotion and advertising capabilities of a fully public offering while retaining the cost and compliance efficiency benefits of a traditional private placement. It is the belief of RDR management that these core benefits are the key components driving the enhanced volume and capitalization statistics.

The SEC usually releases statistics prior to mid-year for the program – so we will have to wait until 2015 to obtain final data for the Regulation D exemption total volume data for 2014.  Based on our internal data and experience in the market, and polling from other sources in the industry, it is our estimate that 2014 will exceed all prior years for capital raised under the Regulation D program.


Wednesday November 19, 2014

Category: Capital Formation and Regulation D

Three Lesser Known Pitfalls to Raising Capital Improperly

Any company seeking to raise capital from investors should explore the use of a proper securities offering to accomplish that task.  While compliance options vary – most small and medium size private companies will choose a Regulation D exempt offering to solicit investors and execute the resulting securities sales in compliance with State and Federal rules.  While there are many pitfalls to raising capital improperly – in this blog we will highlight three that entrepreneurs may not be aware of:

1.  Complications in Later Rounds of Funding

If you raise capital improperly – it can negatively impact executing additional rounds of funding.  An example of this would be:

Company X raises a $2mm first round of equity from individual investors that is completed out of compliance and outside of a traditional and proper offering.  Company X operates and two years later is now in need of expansion capital and seeks funding from a private equity (“PE”) firm.  The PE firm will invariably complete due diligence on the original round of capitalization and will uncover that those sales were executed improperly.  This not only points to executive mis-management of the entity (not attractive to the PE firm) but is also a capitalization and investment risk for the PE firm.  If the PE firm invests, and there is a subsequent rescission issue for the first round capital, it may well be the PE firms capital that goes to pay for the rescission.  Further, such a rescission could damage the company operations going forward and damage the returns for the PE firm (or individual investors).

2.   Lack of Concise Terms

Many times the complexities of transaction structure do not become apparent to an issuer or investor until that issuer experiences operating difficulties.  Normally investors investing into an early stage company (or, for example, a real estate project) would be provided a liquidation right that provides certain rights upon a liquidity event or dissolution of the issuer company.  This is especially true if the investors are providing the bulk of risk capital.  Raising capital improperly tends to involve poor structuring and poor documentation reflecting this structure.  Thus, many out of compliance early rounds do not have specific terms for the securities sold to investors.  Many times investors find out they have weak liquidation rights upon a liquidity event or the company failing in its operations.

3.  Leveraging Institutional Debt

This pitfall is similar to the first – except here it is an institution contemplating providing a debt facility to the company and engages in due diligence on its prior capitalization rounds.  No bank or institutional lender will want to provide leverage and credit to a company that has the potential for a rescission of equity capital that may result in damaging operations and potentially causing a default on the financing provided.

While many pitfalls of raising capital improperly are well known – there are plenty that are lesser known but just as important and just as damaging if they come to fruition.  Interested in executing your capital raise properly?  Call us today to discuss a Regulation D exempt offering for you company.


Tuesday June 17, 2014

Category: Capital Formation and Regulation D

Sector Highlight – The Craft Beer Industry and Regulation D

Craft beer brewing has been a high growth sector for many years. Each year we see an increase in the number of early and expansion stage craft brewing operators using the Regulation D program to raise capital for start-up and growth of operations. Craft brewers currently provide an estimated 108,440 jobs in the U.S., including serving staff in brewpubs. Growth of the craft brewing industry in 2012 was 15% by volume and 17% by dollars compared to growth in 2011 of 13% by volume and 15% by dollars (Source: Brewers Association).

Craft brewers have some advantages in executing a securities offering under 506(c) to raise capital.  Most of these operators have started as small micro-brewers and usually have a core following of fans for their brews.  In addition, many have developed solid social networking assets which can be deployed to promote the 506(c) offering. The marketing mantra of “Like our beer? Buy our stock!” can be fully exploited under a 506(c) offering with general advertising of the investment opportunity to accredited investor fans of the brewer and beer in general.

We call this a “passion play” and involves invoking the passion an investor has for the specific business or industry to attract investment. It is very similar to how our green energy clients leverage the passion for supporting environmentally friendly technologies and business models to raise capital from investors.

Call us today to discuss your company and the project of raising capital under Regulation D!  (970) 484-1109.


Thursday April 24, 2014

Category: Capital Formation and Regulation D

The “Dartboard Approach” to Advertising and Promoting a 506(c) Offering

Regulation D 506(c) provides issuers with the capability to engage in general advertising and solicitation of accredited investors while still retaining most of the core benefits of a traditional private placement including;

  • limited interaction with the SEC
  • greatly reduced preparation and execution expenses
  • reduced timeframe for preparation and implementation

While it may be tempting to deploy a large advertising campaign for traditional advertising mediums like television or radio ads, we typically advise a more targeted approach initially.

The staff at Regulation D Resources coined the phrase “the Dartboard Approach” in describing our typical guidance to issuers regarding promotion.  The Dartboard Approach is a strategy that focuses promotion efforts on the most likely sources for accredited investors first with subsequent tactics employed from there forward to source investors from other avenues.

The first step in the Dartboard Approach is to analyze any existing assets or promotional channels the client may have available for promotion of the offering.  This may include sphere of influence resources, affiliates, company associates, and the usual “friends and family” channels for promotion.  It can also consist of operational assets such as websites, social media campaigns, and customer base resources.  This is the “bulls eye” of the dartboard and represents people that are involved or knowledgeable about the company, its operations, and thus would tend to consist of high quality prospects for investment.

The outer “rings” of the marketing approach now focus on promoting to investors that would not be within the issuers immediate sphere of influence.  Note the issuer may use some of its existing assets (websites, social media, etc.) to introduce new investors to the company and the offering.  At this point the Company may then begin to explore more traditional ”open” advertisement to unrelated individuals in an effort to source accredited investors for the offering.

By focusing effort and energy into the center “ring” the issuer is maximizing its efforts to promote to investors that would be familiar with the company and its operations.  This may allow the Company to source most or all of its capital from the center “ring” and reduce advertising costs for a full scale open advertising campaign.

Questions about Regulation D 506(c) or our services?  Call us today to discuss your transaction: (970) 484-1109



Wednesday February 05, 2014

Category: Capital Formation and Regulation D

Implementing a Private Placement Offering before or after soliciting investors – which is more effective?

We have encountered many business owners and entrepreneurs over the years that decide to forgo the use of a private placement offering until such time as they have “interest” from investors.  Many are seeking to avoid the time and expense of preparing the offering until after they have secured interest from investors. In our opinion this is a critical and costly mistake that usually results in a failure to secure investor capital for the subject company.

In this post we will explore some of the problems that arise when a company seeks capital from individual investors, or even indications of interest, without a private placement offering in place.

Problem #1:  Lack of Concise Structure

Securing interest from investors requires concise, professionally developed transaction structure.  Simply using a business plan or executive summary with investors is not providing them with proposed structure that is suitable for evaluating a potential investment into your company.  Most business plans simply state an aggregate amount of capital being raised with no mention of the type of securities being offered, terms, minimum investment, investor rights and preferences, and numerous other pertinent variables.  You will find it nearly impossible to secure any interest from investors by using a business plan.  At most, an investor may express some nominal interest in the company’s vision and planned operations but will not have the capability to provide a true commitment for investment.

Problem #2:  Inability to Accept Investment

In order to accommodate the investment from an interested individual the Company will need to execute a proper private placement offering to sell the investor the equity or debt securities that will result from execution of the investment transaction.  It is far more effective to have this capability in place when you initially solicit the investor – rather than soliciting the investor and then putting the investor on hold while an offering is formulated (at which time they will have to revisit and re-evaluate the transaction again).  If an investor is interested in your company’s investment opportunity – you should have the capability to move forward and capitalize on that interest and execute processing their investment in a timely manner.  This is not possible outside of a properly prepared offering.

Problem #3:  Disclosure is Responsibility of the Company

It is the company’s responsibility to provide the investor with everything needed to properly evaluate the company’s operations, the investment transaction, terms of the investment, and the risks involved.  A business plan or executive summary does not provide for these requirements.  Thus, initial interaction with an investor outside of a structured offering does not accommodate the disclosure needed for proper vetting of the investment.  In turn, investors are typically unable to provide an indication of commitment to the investment opportunity.

Problem #4:  First Impressions Count

You never get a second chance to make a quality first impression with an investor. We ensure our clients provide an impressive first impression with investors because we develop Tier 1 grade Presentation Grade PPM documents that showcase the company’s vision, products, services, and the investment opportunity in an ultra-high specification prospectus package.

Providing an investor with a professionally prepared, accurate private placement offering tells the investor the following about your company:

  1. You are serious about raising capital properly
  2. You intend to comply with all rules and regulations in handling their investment into your company
  3. You are sophisticated and savvy to the requirements of soliciting investors and accepting their investment
  4. Using a private placement offering from the outset of interaction provides investors the positive perception that you will manage the company’s planned operations in the same manner as you are managing soliciting their investment into the company – with professionalism and in accordance with applicable regulations.
  5. You want to provide full disclosure to the investors about the company and risks so they may make an accurate decision regarding participation in the investment

Is it worthwhile to prepare a proper private placement offering and related prospectus materials prior to soliciting investors?  The answer to that question is simple:  how serious are you regarding raising capital for your company properly and effectively?

Call us today to find out how we can assist you in executing a professional private placement offering: (970) 484-1109.


Thursday December 05, 2013

Category: Capital Formation and Regulation D

The Use of Warrants to Attract Investor Capital

Raising private capital successfully depends on numerous variables:  solid company fundamentals, compelling risk – reward, experienced management, and attractive transaction structure. Capital formation is typically based on two primary structures:

(1) equity (common equity, preferred equity, convertible preferred) or;

(2) debt (debentures, convertible debentures)

Successful capital formation is heavily reliant on utilizing the appropriate structure for the specific business, industry, state of operations, and risks involved in a specific offering.  One additional option in developing attractive structure is utilizing warrants.  A warrant is a contract that provides the holder with the option to purchase equity in the Company at a future date and at fixed terms.  Why are warrants an attractive alternative to investors and in what situations are they best employed?

Warrants provide investors the capability to increase their exposure to the company’s equity without initially putting the capital at risk.  This provides the investor the capability to monitor their initial investment with the issuer company, analyze the company’s operational progress, and execute a decision to invest additional capital via the warrants at a later date.  This allows the investor to participate with a larger investment and allows the investor to monitor company progress and only commit more capital when the investor is confident the company is executing properly.

The warrants typically offer compelling terms for the investor allowing them to increase their investment in the Company at an attractive share or unit price.  The warrants will have an exercise period that provides the term for execution of the warrant.  This time frame should provide the investor ample opportunity to monitor the company’s progress and evaluate whether they should participate with additional capital via the warrants.

Warrants work well in situations where the subject company has significant growth potential but also some increased execution risk that makes it daunting for an investor to participate with a significant amount of capital in the early stages of growth.  It provides a compelling incentive for the investor allowing them the capability to leverage significant additional return from the company, assuming it executes properly, without putting all of the investor’s capital at risk early in the execution and growth phase of the company.  When executed properly – adding warrants to your transaction structure can greatly enhance your capability to raise capital from investors.

Interested in raising capital successfully?  Call us today and learn how a properly structured Regulation D offering can help your company capitalize its operations.


Wednesday October 09, 2013

Category: Capital Formation and Regulation D

Why Business Plans Fail at Raising Capital

The path most private companies follow when attempting to raise capital from investors typically involves developing a business plan or executive summary and then promoting that document to investors.  This is also the primary reason why the vast majority of those companies fail at raising capital for their business or project.

Business plans have significant limitations regarding accommodating investment from individual investors:

Issue #1 – Regulations:  There are regulations that apply to a private company raising capital from investors.  Unless you can claim that the investor is a founder in the business or project – and was inherently involved in the development of the business – that investor will be deemed an “outside” investor. Raising capital from that individual, even if they are a friend or family member, will require the use of a proper securities offering.  We have seen numerous instances of companies that raised capital improperly to only have it cause significant problems later including fines and forced recission of the investors capital.  A Regulation D offering ensures you are raising capital in compliance with State and Federal rules.

Issue #2 – Lack of structure:  Raising capital from investors involves far more complexities than simply providing them a summation of your business plans. Are the investors purchasing equity or debt securities?  If equity – are the shares or units preferred or common?  Are they convertible?  Do they have voting right?  Do they have a liquidation right or other security attached to the securities?  You will fail at raising capital unless you provide concise and proper structure to investors. Sophisticated investors will expect and demand this from you as it is your responsibility to provide investor these critical transaction particulars. Even soliciting an indication of interest from an investor will require that you provide them specific transaction structure and data.  Without this information they are incapable of vetting the investment opportunity and expressing interest.

Business plans serve an important function for certain businesses – but they should not be utilized as a means to solicit investment or accommodate investment from investors. A Regulation D private placement provides the needed structure to properly interact with investors, solicit interest, and accept investment.



Wednesday May 22, 2013

Category: Capital Formation and Regulation D

Interested in learning more about our services?

Continue reading or call us at 720-586-8610