Investing has been reserved for the wealthiest Americans only with no option for the everyday investor to benefit from rising startups. Since 2012, Regulation A+ presents an exciting opportunity for companies to raise capital in the US and widens the net significantly to who can invest in them. The United States Government created the JOBS (Jumpstart your Business Act) in 2012. Part of this Act was called Regulation A+, allowing companies to raise between $3M and $75M.
Since Regulation A+ was passed, it has significantly opened up the investment landscape to a broader range of retail investors. Previously, investors were eliminated from opportunities due to their assets or income levels not qualifying them to invest.
With Reg A+, investors can invest much smaller amounts, receiving a piece of ownership of the company, usually in shares. Depending on the success of the company and its potential to go public or be sold, they can then make higher returns on their investment.
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Companies that use equity crowdfunding can be at any stage as long as the use of funds is clearly outlined in their marketing materials. The importance of an engaging story, attractive brand, and other content like corporate video to present the investment opportunity can significantly boost the success of a campaign.
The popularity of Reg A+ and equity crowdfunding has continued to grow and the potential for success is reflected in the statistics below.