There is a reason why 4.6 times more private exempt securities offerings are put under Regulation D than Regulation CF. Let's go through what those differences are so that you can make your own decision on what's best for your security offering when you're choosing an exemption between Regulation D and Regulation CF.
So when the big showdown is between Regulation D and Regulation CF, the two major opponents, when it comes to exemptions from registration under the Securities Act, now I there is another opponent out there and we'll Asterix like here, Regulation A does exist. Regulation A though is a little bit different, because you still make a filing, and it's reviewed and approved by the SEC. So it's not like a true like file a Form and you're automatically exempt. So it's a different kind of
opponent. But two big opponents are Regulation D and regulation CF. Now, let's talk about the stats and the differences. In one corner, we've got Regulation D, the heavyweight champion of the world, with 4.6 times more knockouts than Regulation CF. Why 4.6? Well, first, you've got Regulation D breaks up into two different rules. And one of one of those rules is the rule that you'll pick, if you go with Regulation D, in one corner, you've err in one hand, you've got rule 506b 506. B is great.
It's also concert called friends and family because you can take non accredited investors up to 35. And then a 90 day period, and an unlimited number of accredited investors, you can also raise an unlimited amount of money, you're not stopped at 5 million, 1 million, anything, you can raise $1 trillion. If you can, if you can give me a call, definitely we need to partner up because $1 trillion is a lot of money. And if you
can raise that much, well, I want you on my team. But that aside, Regulation D rule 506b, so the other fist is a great regulation, we can raise an unlimited amount of money from an unlimited amount of accredited investors and the knockout punch for it, you can advertise so you can put a billboard on Main Street, you can plaster the internet with ads, just to get your name out there and get your investment
out there. The big trouble with 506c, the one where it gets hit and they've got that rule is because we can't take any non accredited investors. In fact, we actually have to make sure that each one is accredited by having third party verification. But having the ability to raise an unlimited amount of money getting to choose between whether we have non accredited or an accredited investor is a pretty major win for it doesn't
it sound like 4.6 times more knockouts. But that's not to say that there's not a lot to be said for the other opponent, Regulation CF. Now, regulation CF doesn't break out into different rules like that it just as one rule. So regulation CF lets you raise money from both accredited and non accredited investors. It lets you advertise. Now, what's the problem with Regulation CF? Why isn't it getting more than
Regulation D? Two reasons. Number one, it's got a cap of $5 million $5 million in any 12 month period, kind of a negative. The other big problem with Regulation CF. And to me, this is the biggest problem, you still have to do a filing this time it's on a form C versus a Regulation D is on a form D your stuff to do that filing. But you've got to have all of your marketing and all of your transaction go through a
registered portal. Ah, what is a registered portal, a registered portal is a third party who puts your name and puts your investment out there and take some of your profit. How much of your profit I've heard as much as 10 to 12%, which is a huge, huge chunk. Now maybe there are some that are less that take charge less. But you have to ask yourself if you're not able to
actually put it out there yourself. You're still You're gonna be responsible for marketing it to drive all your traffic to this third party portal, that's not even you, you don't even get to control that traffic. So you have to be driving your own traffic to this third party portal, where they also have all of your competitors investments as well.
And they charge you 10 to 12% for the privilege, and the preparation of all the documents needed for Form C and to comply with REG CF cost just as much as that in Regulation D. That's why when it comes to the ultimate battle, to me, I think the clear winner has always been Regulation D and the stats show it 4.6 times more, a lot of people come to me after trying to do a Regulation CF, it just didn't work out, it was
expensive. And a complete flop Regulation D, we can craft a marketing plan with you to make sure that your regular offering is successful. And the the cap on the lit number of accredited investor or non accredited investors isn't that much. If you've got the right network, if you don't have the right network, then you only can mark it to your right your accredited investors. But if you've got the rights pitch, and you've got the right story, your Regulation D offering is gonna be successful.
So now it's time for you to make your own decision on what works best for what you're offering. To me. It's always Regulation D. So if you give me a call, wanting to talk about what the two differences are, I'm always gonna say Regulation D, I'm happy to have a conversation comparing and contrasting the two, but just know I'm always going to be on the side of Regulation D, it's the heavyweight champ and you don't go against the champ. But I'm always happy to have that
Regulation CF is a fine choice. I may be in favor of Regulation D but it's still a very, very good choice. Regulation CF though has those negatives. And then a plan can be worked out around those in order to solve it through Regulation D. Or if Regulation CF is the right choice for you. That's great too. Now if we can help you either make that choice or if you need help with your Regulation D offering, give us a call and let's see if I can help you