You know about billion-dollar startups (so-called unicorns) and massive technology IPOs. But what if you're a small business looking to raise a more moderate amount of money? That's where a recent SEC development -- called Regulation A+ -- enters the conversation.
"Reg A+ permits two tiers of offerings: one (Tier 1) for offerings up to $20 million in a 12-month period, and another (Tier 2) for offerings up to $50 million in a 12-month period. Both tiers must meet certain basic requirements. Tier 2 offerings need additional disclosure and ongoing reporting requirements."
Pursuing a traditional technology IPO can cost a company millions of dollars. In stark contrast, a Reg A+ offering can cost about $100,000 -- with annual compliance costs of about $5,000 to $10,000, Jason mentioned in a June 2015 article.
I don't know how many small businesses will pursue the Reg A+ path, but we're watching the situation closely -- especially as older (but still growing) small tech companies begin to learn about the recently activated regulation.
