On Thursday, Elio Motors founder and CEO, Paul Elio sat down with Cromwell Coulson, CEO of OTC Markets and Ron Miller of StartEngine to discuss the use of Regulation A+ and advancements in capital formation.
Elio utilized the StartEngine equity crowdfunding platform to raise about $17 million from large and small investors alike (not just accredited investors). As the IPO market has dramatically declined, Regulation A+ represents a new opportunity for smaller companies to raise capital while providing all types of shareholders to benefit from liquidity provided by listing on a public marketplace.
During the discussion, Elio described Regulation A+ as an innovative policy decision that will benefit entrepreneurs, investors and the economy:
“Regulation A+ is how Wall Street was meant to work. In Wall Street’s early days, entrepreneurs with a vision to create something great went to the Street to raise money, launch their companies, create jobs and build our economy. Regulation A+ gets back to these roots of connecting entrepreneurs with investors and helping launch big ideas and building things of sustained value.”
“The JOBS Act has lifted the veil on capital raising for small companies, taking what was previously a confidential, restricted offering process held behind closed doors onto the Internet and making it available to the crowd. We are thrilled to welcome Elio Motors, the first company to go public under Regulation A+ on our OTCQX market. Trading on OTCQX will allow Elio Motors to provide an efficient and transparent public trading market for its investors as it focuses on growing the company for the long-term.”
In regards to Elio’s success on StartEngine, Miller added:
“By allowing the public to be a part of a potentially disruptive startup, while also helping create American jobs that will boost the economy, this raise marks a new chapter in a financial revolution. Elio Motors is emblematic of what equity crowdfunding can do to enable innovation and turn bold ideas into real-world products. Never before have small business owners had direct access to investors at this scale, allowing them to set the terms of their own deal without middlemen or other barriers to success.”
The following is Elio’s timeline:
- November 2015: The company introduced the P5, its fifth-generation prototype, featuring a 0.9 liter, 3-cylinder engine built by IAV specifically for Elio Motors.
- January 12: Elio Motors announced it will begin building its E-Series of prototype vehicles for testing and engineering purposes.
- On January 20: The company launched its first national advertising campaign to help create additional awareness and generate more vehicle reservations.
- On February 12: Elio Motors reached 50,000 reservations for a place in line to buy the vehicle.
Elio is one of the first companies to leverage Titel IV of the JOBS Act which created the updated exemption called Regulation A+. Commonly described as a mini-IPO type vehicle, issuing companies may raise up to $50 million in either debt or equity securities.
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