Under ‘Reg A’, Firms Ready to Raise Up to $50 mil

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Brokerdealer.com profiles that some entrepreneurs and business owners say they’re preparing to raise up to $50 million in capital from investors, without facing the legal costs and financial reporting requirements of going public, taking advantage of Reg A that kicks in Friday.

The rules stem from the 2012 JOBS Act, which was established to help fledgling companies raise capital to expand and create jobs. As of Friday, the rules raise the cap on the amount of equity a business can issue privately, under what’s known as “Reg A” to $50 million, from $5 million.

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In addition, they do away with a requirement for businesses raising more than $20 million to pay separate fees and file paperwork to the federal Securities and Exchange Commission, as well as regulators in every state where investors purchase shares. The offerings are open to mom-and-pop investors.

To find out how some small firms are looking forward to this new rule, read this WSJ article.