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The 'Mini IPO' – How Companies Are Raising Capital From Retail Investors Without Being Publicly Listed

Growing a business is hard, especially when they have limited access to capital. Thousands of businesses with the potential to make a positive impact on the world fail every year simply because they don’t have the capital to scale or sustain growth.

Raising capital from friends and family can only take a company so far and access to venture capital can be extremely competitive, not to mention expensive. Founders often find themselves forced to give up a majority share of their company to venture capitalists in early funding rounds.

The other traditional option of raising capital through an initial public offering (IPO) by selling shares of the company that will then be traded on the stock exchange simply isn’t feasible for most early stage companies. The process involves a tremendous amount of red tape and hefty ongoing costs.

Regulation A+: The “Mini IPO”

The JOBS Act established the framework for Regulation A+, which was created to provide small companies with a more streamlined and cost-effective means of raising capital from individual investors.

Under Regulation A+, companies can now sell securities to the general public, including non-accredited investors, without the burden and costs that go along with becoming a publicly reporting company.

This regulation is now being used by several companies to raise growth capital, fund real estate deals, and even fractionalize and sell shares of assets like real estate, artwork, collectibles and even race horses.

Knightscope KSCP recently raised two rounds of funding through Regulation A+ before becoming publicly listed on NASDAQ.

Dalmore Group, the leading broker-dealer for Regulation A+ raises, has already helped over 200 companies raise capital under this regulation. Some companies that currently have offerings include Aptera Motors, Boxabl, Home Bistro, SafeRx and dozens of others.

Benzinga will be talking with Etan Butler from Dalmore Group during a free live event at 2:00 PM ET on June 28, 2022, about how companies can use a streamlined process for launching a Regulation A+ offering. This even will be live on YouTube.

Image by Prostock-studio on Shutterstock

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