How do I raise more than $1.07M with Reg CF?
With a Small Online Public Offer (OPO), a company can only raise up to $1,070,000 per year. Although this is a significant amount of money, many companies need more capital as they grow. The good news is with StartEngine Crowdfunding, Inc. there is an easy path to raising up to $50M per year with a Large OPO, also known as Regulation A+ (SEC term), or with a Select Online Public Offering known by the SEC as 506(c).
Conduct a Regulation A+ offering after your Regulation Crowdfunding offering
After closing the Small OPO, email firstname.lastname@example.org and ask to convert your campaign page into a Large Online Public Offering through StartEngine Crowdfunding, Inc.
The new page will actually feature the same URL you have published on social media and with the press. The only difference is your campaign page will have a different look:
- The original page you used for the Small OPO now has a new URL. Everything stays the same. The campaign is closed and the results are displayed on the page and the tombstone.
- There is a "Reserve" button instead of the "Invest" button. Your prospective investors will be reserving shares until the date when the SEC qualifies your Large OPO offering. Investors who reserve shares are not committed to purchasing them and your company is not committed to selling them.
- The comments section has been reset because this is a new, Reg A+ offering.
- You need to edit the page to explain you are testing the waters for a new raise. This is done in the campaign editor. You do not have to disclose the terms of the new offering because you are just testing the waters.
The next step is to hire a securities attorney to prepare the offering documents and submit them to the SEC for review. This process takes about 12 weeks.
Conduct a Private Offering immediately through StartEngine Crowdfunding, Inc.
You are able to raise at the same time or right after a Small OPO additional capital in a Select Online Public Offering or 506(c) raise. Keep in mind this raise is only for accredited investors and includes a verification process to qualify these investors.
StartEngine Crowdfunding, Inc. offers the ability to offer to prospective accredited investors the ability to invest in a 506(c) raise. The benefit is that you can raise $1,070,000 with a Small OPO and then additional funds from a 506(c) raise.
The terms for the 506(c) can be different. One main difference is the securities purchased in a 506(c) do not have the liquidity provision offered to a Small OPO in which shareholders can sell their shares one year after the Small OPO has been completed.