Currently, the United States has more than 14 million accredited investors “AI” and they control more than $75 trillion of wealth - which need to be invested prudently.
For the first 6 months of 2022, almost US $30 billion were raised via private placements compared with $9 billion raised via traditional IPO. The mini-IPO of private placements is giving the traditional stock exchanges a run for their money. The trendy and easier way to raise money -via funding portals - is outperforming the costly and complicated public listings.
Companies raising money cannot afford to spend huge sums of upfront monies on IPO advisors, accounting, book running, legal, investment banking, investor & media relations, sponsorship, taxation and valuation. IPO candidates can set back by $10 million to $15 million in fees before raising a penny. Such undertakings can only be stomached by “successful” and cash rich firms. Fast growing companies cannot afford to get into this. They need to raise money fast to fulfil their growth requirement and to conquer market share.
The rapid rise and decline of the SPAC (Special Purpose Acquisition Companies) is no longer the most attractive and cost-effective fundraising and listing method.
Fast growing companies are looking at listing their shares, bonds, warrants, notes onto funding portals that have millions of investors (any American that is above 18 years old) that will invest in them, online.
For the last 80 years, private companies could only raise capital from accredited investors, the wealthiest 2% of Americans. On April 5, 2012, President Obama signed a landmark piece of legislation called The JOBS Act, allowing entrepreneurs to go to the crowd and publicly advertise their capital raises. On May 16, 2016, four years after the JOBS Act was signed, Title III (aka Regulation CF) of the JOBS Act went into effect, allowing private early-stage companies to raise money from all Americans. Startups can now use equity crowdfunding to turn their customers into investors.
Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $5 million from all Americans. Prior capital raising options, limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive securities, typically equity, in the startups they back.
Title IV (Regulation A+) of the JOBS Act went into effect, allowing private early-stage companies to raise money from all Americans. Startups can now use a Mini-IPO under Reg A+ to turn their customers into investors.
Reg A+ is a type of offering which allows private companies to raise up to $75 Million from the public. Companies looking to raise capital via Reg A+ will first need to file with the SEC and get qualification before launching their offering. The costs associated with a Reg A+ offering are much lower than a traditional IPO and the ongoing disclosure requirements are much less burdensome, effectively making a Reg A+ offering a mini-IPO.
ApexCapital.Asia Ltd helps companies that are raising from US $1 million to $75 million with the preparation of the offer documents to be listed on ApexCapital.Asia Ltd portal and coordinate with the US legal team to do the necessary filings with the Securities and Exchange Commission “SEC” . ApexCapital.Asia Ltd works closely with the Raffles Financial Group, MooMoo Financial Group, Boustead Securities and others leading finance houses to help companies to get the bigger fundings that they need and their public listings on major stock exchanges in America, Australia, Frankfurt, Hong Kong and Singapore.
