Fwd: Why companies are raising capital via Reg A+ instead of VC

Why companies are raising capital via Reg A+ instead of VC With the emergence of Regulation A+ as a capital formation option for mature startups and mid-stage companies, entrepreneurs now have two viable options for significant capital raises–the familiar VC route and Regulation A+. Regulation A+ is an updated securities regulation that allows companies to raise up to $50 million from accredited and non-accredited investors worldwide. As of Dec 31st, 2018, 157 companies have raised $1.4 Billion. These offerings ranged from $1 mill up to $50 mill and averaged in the low teens. Reg A+ can be a far better fit than Venture Capital I have raised funds from blue-chip Silicon Valley VCs, and I was a senior exec for two successful NASDAQ IPOs (TATE and SYMC), and I also built a VC firm. I've made some 40 angel and mezzanine investments in private companies (including  INFN, AMRS, Bloom Energy and Ask Jeeves). I have been immersed in Regulation A+ for four years through Manhattan Street Capital, the Regulation A+ funding platform. Through these experiences, I am reasonably well positioned to observe how Reg A+ compares and contrasts with Venture Capital.    Many of the companies I meet with that are viable candidates for VC are opting for Reg A+ instead. I see Regulation A+ emerging as the superior choice in the following circumstances: 1) More direct control over your company's destiny. One appealing facet of Regulation A+ relative to VC is that the CEO has control over so many aspects of their offering destiny. For example; company valuation, size of the raise, the type of security you offer, and how long you choose to spend in live offering mode (3 months to a whole year?). You get to select where you will list your stock post offering or if you will list it at all. Of course, all this freedom does come with a price; there are no guarantees your offering will succeed. With VC, the entrepreneur has much less control over their financing and how their business gets managed afterward.    2) Early, low-cost IPO. While Reg A+ can be a direct method of taking a company public to the NASDAQ, venture capital cannot do so directly. The Reg A+ characteristic of being able to market your company freely instead of the traditional S-1 IPO Quiet Period is very appealing. In Reg A+ you can raise capital for an IPO to the NASDAQ while retaining the flexibility that if you don't reach the NASDAQ minimum capital raise requirement for listing, you can still complete your Reg A+ raise. This is a distinct advantage over an S-1 IPO. 3) Location. Venture capital is local. If your company is far away from a Venture Capital hub, VC is pretty much unavailable. Reg A+ is genuinely agnostic about company location (as long as the company is located in the U.S. or Canada). This democratic access to capital is a huge plus for many excellent businesses and talented entrepreneurs.   4) Customer traction and the credibility it brings. In the case of companies that appeal strongly to consumers, the Reg A+ process of marketing to thousands of investors has additive effects on the company and its brand. Throngs of happy shareholders make for happy customers and vice versa. (We can ask public companies about that phenomenon.) VC is not usually a factor here. 5) Adjustable (and higher) valuation. Typical Reg A+ offerings are far less dilutive for the founders than VC rounds. The ability to raise the share price and valuation of your company during the Reg A+ offering (which can last up to 12 months per SEC Qualification) adds the flexibility to handle a larger capital raise than you had expected while still managing dilution in a balanced way. Ask your local VC friends how they will take to that! 6) Mid-stage companies. For successful mid-stage companies, VC money is rarely an option unless they were already VC funded in an earlier round. There is also the case of mid-stage companies whose VCs have no more capacity to invest but have a great deal of interest in getting liquidity. In these cases, Regulation A+ is a uniquely good option that offers a fresh and less costly approach than reverse mergers or waiting four years for a conventional IPO. Getting access to growth capital for a $50 million business growing 40% per year, at a favorable valuation and with investor liquidity is a true symphony. 7) Investor power. Along with the efficiency of dealing with VC, partners comes the mixed bag of concentrated investor power. VCs are practiced at replacing errant CEOs. This could be a good thing for a struggling company. On the other hand, some founders would rather not put their strategy and role at risk. With Reg A+, founders reduce the likelihood that they will lose control of their companies.    8) Liquidity for investors. In Reg A+ investor's shares can be traded immediately after purchase in most cases through brokers when a company does not list, or on stock markets when it does list. If investors or employees need liquidity, Reg A+ can deliver it much earlier. In fact, Reg A+ is a viable solution for VC firms that have accumulated numerous portfolio companies that are waiting for liquidity.   Summary It is important to note that while Reg A+ is advancing, it is still in its early years – to miss- quote Winston Churchill, "We Are At The End Of The Beginning." Large scale changes to the capital markets, such as those Regulation A+ brings, take time to settle in and for awareness to build. I see a steadily growing number of companies engaging with Reg A+ and a significant shift to more established companies joining the early adopters. Reg A+ presents entrepreneurs with a level playing field for access to capital, based on merit, through which they can raise up to $50 million per company per year–sizable growth capital–and it does so in a cost-efficient and flexible manner. Regulation A+ does not fit all companies, though. Take a look here to see the types of companies most likely to succeed.  Venture capital will adapt and evolve. Some of the change I expect to see will come from Reg A+ filling gaps in the capital formation landscape that VC was not addressing effectively, as you can see above. Reg A+ is improving the efficiency of the capital markets. Scores of companies that couldn't raise capital in the old context will now prosper, boosting U.S. economic activity and employment.   The result: Venture capital is getting a little squeezed around the edges. And this is a good development. All the Best, Rod Turner www.ManhattanStreetCapital.com   Rod Turner is a seasoned serial entrepreneur. CEO of Manhattan Street Capital, he helps CEOs raise capital via IPOs,Regulation A+ and Compliant ICOs for Mid-Stage companies. Manhattan Street Capital, 5694 Mission Center Rd, Suite 602-468, San Diego, CA 92108. 858 366 2585 Manhattan Street Capital (MSC) is paid fees by the companies that make investment and reservation offerings on the MSC website. Be aware that payment of these fees may put MSC in a conflict of interest with the investor. See the MSC fee schedule here. MSC is not a law firm, valuation service, underwriter, broker-dealer or Title III crowdfunding portal and we do not engage in any activities requiring any such registration. We do not provide advice on investments. MSC does not structure transactions. Do not interpret any advice from MSC staff as a replacement for advice from service providers in these professions. Neither the US Securities and Exchange Commission (SEC) nor any state regulator or other regulatory body has passed upon the merits of or given its approval of any securities discussed in this email, the terms of any potential offerings, or the accuracy or completeness of any offering materials. Companies TestingTheWaters™ on MSC are doing so to gauge market demand from potential investors for a possible offering under Tier II of Regulation A+. This email does not constitute an offer of, or the solicitation of an offer to buy or subscribe for, any securities. Further, no sales of securities will be made or commitment to purchase accepted until the SEC qualifies an offering statement and the relevant Issuer company obtains approval from any other required governmental or regulatory agency. Information in this email about a potential investment is qualified by the full documents corresponding to the particular project/investment available at www.manhattanstreetcapital.com by selecting the appropriate company offering page. All information concerning a potential investment has been prepared by and is the sole responsibility of the company using the MSC platform. Neither MSC, nor its affiliates, make any representation or warranty, express or implied, as to the accuracy or completeness of this information, and nothing contained herein, including any forward-looking statements, estimates, projections and/or representations, shall be relied upon as a representation as to past or future performance. MSC is not giving endorsement, analysis or recommendations with respect to any potential investment. All investors should make their own determination of whether or not to make an investment, and should consult with their own legal, tax and financial advisors before investing. This communication is intended solely for the use of the individual(s) to whom it was intended to be addressed. Neither MSC, nor its affiliates, are responsible for any such redistribution or if it is used for any unintended purposes. Please regularly check our website Terms and Conditions as these Terms change often: https://www.manhattanstreetcapital.com/terms. Click Here to Opt Out Rod Turner 5694 Mission Center Road, Suite 602-468, San Diego, CA 92108 Unsubscribe - Unsubscribe Preferences

Sender notified by Mailtrack 08/28/19, 01:10:04 PM

Fwd: How far would you take this...

---------- Forwarded message ---------
From: Oren Klaff <oren@pitchanything.com>
Date: Thu, Aug 22, 2019 at 8:43 AM
Subject: How far would you take this...
To: Steve Scott <stevescott@techacq.com>

... how far is too far?

JUST RELEASED! Read my new book FLIP THE SCRIPT.  How Far Would You Go to Close a Big Deal? Would you drive 150 miles ...  or would you fly across the country? MAYBE I would, but before I would EVER get on a plane to go see a "buyer" there are 3 specific things I would have to lock down: #1 ...    Do they really have the money to do the deal? #2 ...    Is EVERY decision maker at table? #3 ...    How does it "feel" (in other words, do I trust this buyer?) Last Friday I put this theory to the test when I jumped a flight to Phoenix to see a potential investor and close a deal. We needed to meet face-to-face before signing a contract. Then some weird stuff started to happen ... First weird thing, he picked me up at baggage claim in some kind of giant Mercedes off-road truck: I climb in and we shake hands. "The Investor" says, "hey my little boy is in a skateboard competition today, so how 'bout we head to the skatepark to watch?" DARN! I was itching to get the deal signed right away. But what the heck, why not? We arrive to this indoor skatepark on the outskirts of Phoenix -- and sure enough his 6-year old boy is flipping in the air like Tony Hawk up these ramps and flying through the air with ease. It was a good time. A couple hours fly by and the deal is not signed. We were talking about life, personal values and family and now I'm telling him about my own little boy, who is a solid hockey player. So all of a sudden the investor stands up, says to me, "Hey lets get out of here ..." Finally, time to sign the deal.  Only it wasn't Instead of going to his office, we walk to a Starbucks. .. I order a black coffee and WATCH OUT, here comes his order...  He orders 10,000 calories of bars, donuts, sandwiches and smoothies. $100 bucks at least.  Instead of talking about the deal, we ate, and talked about ... fitness, running and sleep routines -- we're both number-geeks. But the deal has not been signed. To speed things along, I start reaching for my briefcase and laptop. All of a sudden he says, "Oh man it's getting pretty late, let's head over to my house you gotta see my High Altitude Hyperbaric Sleep Chamber,  it's like sleeping halfway up Mount Everest!" I was ready to head back to the airport and call the deal off, but I really did want to see the hyperbaric sleep chamber ... Once we get to his house -- really it was a double sized mansion like you might see on MTV -- he shows me some of the most amazing fitness equipment in the world: a $42,000 bicycle, a million dollar swimming pool, etc. After the pool tour I say to him, "Hey it's getting late, I better head back to the airport." The deal has not been signed. The Investor says to me, "Why don't ya stay over, change your flight? We got a spare room and we can do a 10 mile run in the morning." The new plan actually sounded good. I liked having a partner for my long Saturday run -- which is a grueling ordeal even on good days. We were really getting along, and I was having a great time, but ... The deal has not been signed. Quickly, night turns to day, and we get up early, prep our running gear and head out for a 10 mile run. After the run, and back at the mansion I'm thinking, NOW is the perfect time to talk about the deal. Before I can get my laptop out ... He slaps me on the back, "Hey I'm starving, let's head out for lunch." I start laughing inside. Here comes another 10,000 calorie meal and $200 lunch bill! My flight home was coming up soon and I needed to get to the airport. The deal has not been signed. "Don't worry, I'll take you to the airport," he says. What am I here, a Rent-a-Friend? I came out to make a DEAL. He takes me to the airport and parks his $300,000 Mercedes truck on the curb. The deal has not been signed. I open the door to get out. The Investor says, "Hey, wait a sec, didn't you want to show me a few things on that deal??" I look at my watch. Only 6 minutes left, or I miss my flight. There is NO TIME to open my laptop, load a pdf, and give a presentation. So pull out a piece of paper draw 3 boxes and a few lines connecting each box. I've done this kind of deal a hundred times before, so I don't need a computer presentation to explain it. In 4 minutes I give a quick explanation of the deal. Next he says The One Thing I needed to hear: "Oren, that looks good, about what I thought, sounds good ... I'm IN." With zero minutes left the deal just 'done'! If there's ONE LESSON in all this: Buyers of all types -- no matter the deal -- will evaluate you in the 3 critical ways: #1 WHO YOU ARE People associate themselves personally and professionally with people they respect. And you have to spend some real time with someone before they know who you are. #2 YOUR TRACK RECORD Have you done this kind of deal before? That's a question people always want to know, so you have to make it obvious that you know the offer from every angle. When a potential partner wants to work together, they want to know you can do what you say you're doing -- with your eyes closed. In other words, your track record speaks volumes. #3 ARE YOU PUSHY (OR NEEDY)? As I've said a million times before, Neediness Kills Deals. In the final analysis, spend enough time with your buyers so they get to know you WHO you are. Be cool, and never act needy. Get a few copies of my new book: THE BIG IDEA: I don't like being pressured into making a purchase. And I'm not alone. The moment we feel pressured to buy, we pull away. And if we're told what to do or what to think, our defenses go up. In other words, buyers don't put much trust in you and your ideas. However, everyone trusts their own ideas. Accordingly, today, products are bought, not sold. CHECK IT OUT!             Connect With Us: Contact Info: Email: oren@pitchanything.com

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Sender notified by Mailtrack 08/22/19, 11:23:01 AM

Fwd: Mustachioed buck-toothed marketer and cronies charmed the money right out of your pocket

---------- Forwarded message ---------
From: Doug Pew <doug@douglaspew.com>
Date: Tue, Aug 13, 2019 at 3:06 AM
Subject: Mustachioed buck-toothed marketer and cronies charmed the money right out of your pocket
To: <stevescott@techacq.com>

They'd planned for months...

...and booked the best acts in the business.

Eric Clapton, Paul McCartney, Led Zeppelin, Pink Floyd, Tom Petty, the Beach Boys, U2, David Bowie, Bob Dylan...

...anybody who was anybody.

All to raise money for the famine in Ethiopia.

But one band completely stole the show and turned it into a global jukebox.

It was Freddie Mercury and the band Queen who turned a 21 minute set on the 1985 Live Aid stage into Rock 'n Roll legend.

The recent film "Bohemian Rhapsody" not only told a fantastic story of the band's history and rise to super-star status...

...it also shared some of the most fantastic lessons in copywriting and marketing the band used to skyrocket to the top.

Now, some 34 years after that legendary Live aid appearance, the collective surviving members of Queen are worth over 445 Million Euros. That's more than the Queen of England herself, who's worth about 370 Million Euros (source).

On an upcoming episode of my soon to launch podcast, "The Music of Copywriting Podcast" ... TOMORROW'S LAUNCH DAY!!!! ...

... we'll take a look at these hard rockin' copywriting and marketing lessons and talk about how you can apply them to your business.

And you don't have to grow a mustache, don a wife beater, or strap a spiked arm-band to your bicep.

But you may get a chance to sing along with me on the air to some "We Are The Champions" or maybe a little "We Will, We Will Rock You!"

We'll see...

This episode won't go live for a few weeks, but the first few will load bright and early tomorrow morning!

I'm hosting a little giveaway contest for everyone who shares about the podcast launch on their social media.

If you'd like to be entered to win a $300 1-hour coaching or copywriting critique session with me, just click the link below and follow the instructions to share on the socials or via email.

The contest ends this coming Friday.

https://kingsumo.com/g/dqc8kk/the-music-of-copywriting-podcast-launch-giveaway

Watch out for the Killer Queen coming soon!

Doug
The #CopyComposer

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Sender notified by Mailtrack 08/13/19, 03:56:52 PM