The Holistic Approach to Supercharge Your Business Profits
September 15, 2023

How to Market a Reg A+


Of all JOBS Act exemptions, the Reg A+ securities exemption is one of the most well-known and popular.

Since its inception, this exemption has been used to raise over $5B in growth capital by thousands of early-stage companies, with the market growing rapidly year over year. Often referred to as the pre-IPO financing, there are a lot of perks to a Reg A+, but as with all capital raising, the key is in how you tell your story.

In this issue of Capital Raising Online, we break down how to think about marketing a Reg A+ offering. And as usual, we will start with some definitions.

What is a Reg A+ Offering?

The Reg A+ exemption allows issuers to raise up to $75M of capital annually from both accredited and non-accredited investors globally. This can be a valuable source of growth capital, but it can also create other positive opportunities; from tapping into the power of an existing community to building a loyal base of investor-evangelists.

However, before an issuer can take investment from non-accredited investors, a detailed disclosure document called a Form 1-A Offering Circular must be filed with the SEC and qualified by the SEC.

This is a formal disclosure document prepared by securities lawyers and typically takes 3-4 months from start to qualification (i.e. being able to raise capital!). It will include everything from an outline of the business plan, background on the company and its founders, as well as two years of audited financial statements.

Along with the filing of the Form 1-A, issuers will also need to engage a number of service providers to ensure a compliant raise is conducted. Specifically, issuers will need to engage a FINRA-regulated Broker-Dealer who supports AML/KYC checks as well as an SEC-registered transfer agent to manage the share capitalization table (cap table).

Interested issuers should consult their securities lawyers to ensure compliance with all SEC requirements prior to launching their offering.

Once the Offering Circular has been qualified by the SEC, and the necessary partners have been engaged, issuers need to make sure their “funnel” or overall investment process is optimized for success.

Building The Funnel 

For those unfamiliar with marketing, the “funnel” is industry jargon for where a potential investor is in the investment process. It spans from the moment a potential investor first indicated interest (a lead) all the way to a closed investment.

A well-designed funnel is critical to campaign success. While exact estimates vary, most industry professionals will agree that an investor requires at least 7-10 “touches” from an issuer to move all the way down the funnel from lead to a closed investment (assuming they are a well-qualified investor lead). These touches come in the form of everything from press releases and emails to CEO webinars, down to personal phone calls.

Below we highlight some of the different lead generation or “funnel filling” strategies that issuers can deploy. But before we get to that, there are two key points worth highlighting.

The first is the importance of a streamlined investment process. Issuers will need to spend substantial marketing dollars to both fill their funnel and work investors down their funnel. Ultimately, conversion is the name of the game with online capital raising (even if issuers have their own community!).

We like to draw on the example of Amazon’s wildly successful “one-click-checkout” offering. People have short attention spans and expect seamless online experiences – investing is no different.

That is why Issuance Express was developed to offer an industry-leading checkout experience that takes less than 40 seconds for an investor to complete an investment. Issuance also offers a streamlined mobile and desktop-friendly investor experience that allows investors to check out using Apple Pay, Google Pay, as well as standard payment methods. Overall, using Issuance Express, issuers can meet investors where they are, and offer a more seamless experience, resulting in a more successful capital rais.

The second point is the importance of sophisticated and consistent communication with investors.

No investor wants to invest in a static business. It is critical that issuers communicate the potential of the business, which can take the form of drip campaigns and CEO videos, among other “evergreen” content. Issuers also need to communicate how they’re working (and executing!) every week to achieve that potential, and ultimately build the necessary trust to earn an investment.

From an investor standpoint, these communications typically come in the form of press releases or at a minimum, email updates. Issuers should have their own email CRM (Klayviyo, HubSpot, etc.) and take complete ownership of the relationship with their investors or potential investors.

Although not the focus of this newsletter, we previously released a newsletter – Why Are Issuers Paying to Build Another Company’s Investor Community – that explained the importance of owning the investor relationship (and not paying to build another company’s community!). We encourage you to give it a read.

To summarize, in order to maximize conversion, and by effect,  capital raised, every lead needs to be properly nurtured and given the investment path of least resistance. From press releases to phone calls, to a rapid checkout process, every effort needs to be made.

Once the initial investor funnel has been well-architected, issuers need to start filling the funnel with leads while maintaining a close eye on performance to further optimize the flow and audit the marketing partners.


Click here to read the full article.