The ‘Mini IPO’ – How companies raise capital from private investors without being publicly traded

Growing a business is difficult, especially when they have limited access to capital. Thousands of companies with the potential to positively impact the world fail every year simply because they lack the capital to scale up or support growth.

Raising capital from friends and family can only take a business thus far, and access to venture capital can be extremely competitive, not to mention expensive. Founders often find themselves forced to hand over a majority share of their companies to venture capitalists in early funding rounds.

The other traditional option of raising capital through an initial public offering (IPO) by selling company shares that are then traded on the exchange is simply not feasible for most early-stage companies. The process involves an enormous amount of bureaucracy and significant running costs.

Regulations A+: The “Mini IPO”

The JOBS Act set the framework for Regulation A+, which was created to provide small businesses with a more streamlined and cost-effective way to raise capital from individual investors.

Under Regulation A+, companies can now sell securities to the general public, including non-accredited investors, without the burden and costs associated with becoming a publicly reporting company.

These regulations are now being used by several companies to raise growth capital, fund real estate deals, and even fractionate and sell shares of assets such as real estate, artwork, collectibles, and even racehorses.

Knightscope KSCP recently raised two rounds of funding through Regulation A+ before it went public on NASDAQ.

Dalmore Group, the leading broker-dealer for raising A+ regulations, has already helped more than 200 companies raise capital under this regulation. Some companies that currently have offers include Aptera Motors, Boxabl, Home Bistro, SafeRx, and dozens of others.

Benzinga talks to Etan Butler of Dalmore Group at a free live event at 2:00 PM ET on June 28, 2022, about how companies can use a streamlined process to launch a Regulation A+ offering. This will even be live on YouTube.

Image by Prostock studio on Shutterstock

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