06 Jun Reg A+ Nears its Birthday

June 19 will be one year since the effectiveness of the SEC’s new rules on Regulation A+ under the Jumpstart our Business Startups (JOBS) Act of 2012. So what’s happened in the interim? According to information I very recently received: 99 deals filed, of which 55 were Tier II and 44 were Tier I (effectively under old Reg A). Of those, 63 deals have been “qualified” or approved by the SEC. The only Tier II deal closed and trading is Elio Motors which raised $17 million from over 6000 investors. At least 3 other Tier II deals have had at least one closing on their IPO, but are not yet trading. So I say: a pretty busy year!

Did we expect more? Not sure I did. I knew a few things: 1) it will take time for Wall Street to digest the many benefits of this new technique. 2) many will simply insist on waiting until Reg A+ is truly a deal machine before diving in. 3) some are concerned that the lawsuit brought against the SEC by two states could put a wrinkle in things before it is resolved. 4) a new way of conducting an IPO through crowdfunding portals, sometimes with and sometimes without underwriters, is developing and will take time to take hold and work out wrinkles.

The SEC is behind it for sure. Those of us who understand it know it has the potential to change the game for smaller companies’ ability to raise capital. The naysayers, on the whole, are not fully informed. Let’s get small companies trading through the regulator’s front door so they can grow, create jobs, bring Main Street to Wall Street and have an option outside of venture investors’ collars and other similar restrictions.