Considering a capital raise that you can publicly promote? This overview chart is designed to compare key features of direct offering strategies that permit an issuer to solicit investment from its network. None of these strategies require the use of a broker but all have options to allow you to list your offering on a listing portal like SVX.us.com or a Reg CF listing portal. Some strategies are better suited to issuers trying to raise capital primarily from a large group of community (nonaccredited) investors, others are designed to reach a mix of high net worth (accredited) and community investors and one is limited only to accredited investors. Some are limited to one or a few states while others can be nationwide.
There are many factors beyond those noted in the chart that go into deciding what capital raise strategy is right for your enterprise given the location and makeup of your network and the amount to be raised. Some of these strategies allow for testing the waters before moving forward with a direct offering. Note too that there are a lot of details and nuances to consider for setting up a raise that are not captured on this chart. If you are considering a public raise, we are available to help you choose a strategy and design the direct offering that best fits your goals. Contact us for a free consult call to learn more.
Compare and Contrast: Direct Public Offering Strategies
|Type of Offering||Raise Limit||Type of Investors||Solicitation and Advertising Permitted||Use of Portal or Listing Platform||State Registration Required||Financial Materials|
|Rule 504 (multi-state) direct public offering||$10 million per 12 months||Accredited and nonaccredited||Yes, as permitted by state regulations||Permitted if advertising allowed by state regulations||Yes, if intending to use general solicitation and advertising to reach investors||Varies by state; usually reviewed financial statements|
|Rule 147 (147A)(intrastate or single state) direct public offering||No federal limit; Some states impose a limit of $1 to 5 million per 12 months||Accredited and nonaccredited||Yes, as permitted by state regulations||Permitted if advertising allowed by state regulations||Yes, if intending to use general solicitation and advertising to reach investors||Varies by state; usually reviewed financial statements|
|Rule 506(c)||No cap||Verified accredited investors only||Yes||Permitted||No||No specific requirement|
|Regulation CF||$1.07 million or $5 million with audited financials per 12 months||Accredited and nonaccredited; nonaccredited investors have investment limits||Yes, most advertising is limited to the registered portal||Use of registered Reg CF portal required||No||Reviewed financials for raises between $107k to $1.07MM; audited financials for raises over $1.07MM up to $5MM|
|Regulation A (Tier 1)||$20 million in 12 months||Accredited and nonaccredited; nonaccredited investors typically have investment limits per state regulations||Yes||Permitted||Yes||Varies by state; typically reviewed or audited financials|
|Regulation A (Tier 2)||$75 million in 12 months||Accredited and nonaccredited; nonaccredited investors have investment limits||Yes||Permitted||No||Audited financials required|