We’ve written in the past about the various methods companies in the United States can go about raising money via an ICO/token offering. One of the main methods we mentioned was the use of Regulation A+, something traditionally utilized by smaller companies to IPO that’s been embraced by cryptocurrency companies in the U.S. The problem is as IPO’s have gotten bigger, the cap set up by Regulation A+, $50 million, has severely limited the number of companies which can actually raise under it. It’s also made it harder for smaller companies to IPO in the current economic atmosphere of long-term bullishness and constant inflation.
This is why the U.S. House of Representatives passed the “Regulation A+ Improvement Act” which allows for a 50% increase in the cap under which companies can do a securities offering while still being governed under RegA+.
RegA+ is a regulation passed under the JOBS Act which allows for a more streamlined process than the traditional IPO and allows non-accredited investors to invest. In addition to allowing medium-sized businesses to raise money more easily, RegA+ allows for retail investor participation: a hallmark of cryptocurrencies. It also allows for broader marketing to investors, something which has been and continues to be utilized by ICOs.
Despite its limited scope, RegA+ has been well utilized with companies raising over $600 million since October using the regulation. This trend has not been ignored by the crypto markets either.