SeedInvest has listed its first side-by-side crowdfunding offer using two different exemptions. SeedInvest has listed Wolfprint 3D, a company that has created a proprietary 3D scanning booth that works autonomously. The booth uses 6 high quality off-the-shelf cameras to create detailed and realistic 3D scans of people’s faces.
Under SEC rules, a company may utilize two different securities exemptions at the same time – as long as both are completely compliant. By using Reg CF and Reg D, 506c, a company may offer securities to both accredited and non-accredited investors. This work around may help smaller companies avoid some of the shortcomings of Reg CF. Reg D is the most popular and most successful securities exemption for raising private capital.
We asked Ryan Feit, CEO and co-founder of SeedInvest, about doing a CF/D simultaneous offer, Feit stated;
“Side-by-side rounds allow companies to get the both of best worlds. Companies can raise up to $1 million from non-accredited investors under Regulation CF while raising a few million more simultaneously from accredited investors through Regulation D.”
Asked if he expects to see more of these type offers, Feit shared;
“Unless the cap on Regulation CF is raised by the Fix Crowdfunding Act, we will continue to help many companies utilize side-by-side rounds.”
Some industry advocates believe it is very important to increase the cap on Reg CF to $5 million or even $10 million. This would bring retail crowdfunding more in line with what is needed for highly promising early stage companies to raise sufficient capital. In Europe, an issuer is capped at €5 million but some policy makers want to boost that to €10 million. Issuers may raise more than €5 million online but a prospectus is required. UK based crowdfunding platform Crowdcube did just this in their most recent self-crowdfunding round where £6 million was recently raised.
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