JOBS Act’s, Title IV Regulation A+ ruling; Is your company ready to go public?

U.S. SEC has now allowed non-accredited investors to join in equity crowdfunding and investment in private startups and other small businesses. This is now under the Title IV of the JOBS Act, Regulation A+ investment. Any company from the U.S and Canada that has not been a fully reporting public immediately prior to filing with the SEC is eligible of the said regulation.

According to Tech Crunch the new ruling which amended the Securities Act of 1993 has two levels of offering. Level 1 allows issuers to raise $20 million in a year's time. Level 2 can raise up to $50 million.

The U.S. Securities and Exchange Commission released details on the new Regulation A+. Audited annual financial statements for two fiscal years are required. Bear in mind that the statements should be dated not more than 9 months before the date of filing. For those who are going to present interim financial statements, it is important that it covers a period of half a year or 6 months.  

What's good about the Regulation A+ is that the SEC may allow a company to have a 'testing period' prior actual filings. U.S. This will minimize the overall risk for the company just in case everything will not go as planned. Another good point for Regulation A+ is that one can sell freely tradable shares.  

While there are advantages of engaging into Regulation A+, the fact remains that going public has a lot of complications and will need to be understood further. It is a must that you seek legal advise if a company is ready for this. Otherwise, all your efforts with the offering might just go down the drain because of things which you might overlook.

As the rules were approved by SEC last March 25, this is expected to roll out within the early weeks of June 2015.