Commercial real estate manager Allegiancy announced their $30 million Reg A+ equity crowdfunding offer today during a presentation at SXSW. While speaking at the NextGen Crowdfunding Ignition 1.0 event, Allegiancy CEO Steve Sadler explained how his firm would use the new capital to “attack inefficiencies in the $15 trillion commercial real estate industry”.
Allegiancy describes it’s business as a technology enabled operating platform that has an “intense focus on cash flow and profitability”. Allegiancy said it would be one of the first to use the Reg A+ exemption to raise capital noting that Elio Motors recently successfully raised capital and followed with a listing on the OTCQX.
Sadler said his experience in a previous $5 million capital raise under the old Regulation A (before the JOBS Act updated the rules) set the stage for this year’s mini-IPO raise. Allegiancy raised capital in 2014 and, since that time, states it has experienced a 400% rate of growth.
“We’re synthesizing the best of all three strategies to deliver on the promise of the JOBS Act,” Sadler said. “This is a pivotal moment for American entrepreneurs and businesses. We’re at the forefront of what I believe could be a transformational moment in the American economy as forward leaning and visionary entrepreneurs tap into this revolutionary model of raising capital.”
Allegiancy is working with fabled bankers WR Hambrecht + Co to raise the capital. They have also partnered with David Weild, former NASDAQ Vice Chairman and founder of Weild & Co., to help reach institutional investors.
Title IV of the JOBS Act compelled the SEC to update certain rules thus creating was is now commonly referred to as Reg A+. The mini-IPO type structure allows smaller companies to publicly raise capital online in a crowdfunding round. The offer is not limited to accredited investors and any investor may participate.
Allegiancy will seek to raise a minimum of $15 million and a maximum amount of $30 million at $14/share. According to the offering circular, Allegiancy is currently managing $730 million in real estate. In the year ending June of 2015, Allegiancy generated $3.34 million in revenue. The new funding will be utilized to fund business expansion.
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