Skip to content-main content


An Allegiancy Q&A with WR Hambrecht + Co’s Whitney White on new Reg A+ and mini-IPOs


An Allegiancy Q&A with WR Hambrecht + Co’s Whitney White on new Reg A+ and mini-IPOs

By: Steve Sadler, CEO

March 04, 2016

As Allegiancy launches its $30 million Reg A+ `mini-IPO’ offering, it follows the successful Elio Motors Reg A+ offering in which the company raised nearly $17 million through crowdfunding.

Elio Motors aims to manufacture a three-wheeled vehicle that will get up to 84 MPG with a targeted base price of $6,800.The company has over 50,000 reservations for a place in line to purchase an Elio vehicle.

While Elio raised its money solely through a crowdfunding portal, Allegiancy is using a multi-pronged strategy that combines crowdfunding with more traditional brokerage-based distribution to raise up to $30 million in capital.

Allegiancy has tapped WR Hambrecht + Co to underwrite the offering. WRH+Co has a great pedigree, from serving as an underwriter for Google in 2006 to acting as advisor to Elio Motors on its successful offering. WR Hambrecht + Co was founded in January 1998 to level the playing field for investors and the firm’s corporate clients. Founder and Chairman Bill Hambrecht is a Silicon Valley pioneer who has been financing growth companies from Apple to Google during his time at Hambrecht & Quist and WRH+Co.

We spoke with WR Hambrecht + Co Partner and Head of Equity Capital Markets Whitney White recently about the new Reg A+ to hear his thoughts on it.

Allegiancy: What are you seeing in the IPO market so far this year?

White: “There were no U.S. IPOs in the month of January and only a handful have priced since then. The market experienced a genuine correction and the capital markets window effectively closed. While things appear to be stabilizing, investors and issuers are definitely remaining cautious.”

Allegiancy: Do you anticipate the new Reg A+ rules changing anything in terms of bringing IPOs, or mini-IPOs, to market this year?

White: “I don’t think Reg A+ is doing that, specifically. My feeling is that Reg A+ deals by definition are small and therefore the investor audience for those types of issues is different from the typical institutional investor audience that follows the conventional IPO calendar. Reg A+ offerings, mainly because of their size, target a different group of investors who may be less sensitive to volatility in the overall market because they are more closely connected to the company.”

Allegiancy: How vital is new Reg A+ to entrepreneurship and job creation in the American economy?

White: “I think it’s essential. The whole point of changing Reg A was to provide companies with more efficient, cost-effective access to capital, and capital is what enables companies to grow. If companies don’t have access to capital they gravitate toward merging or being acquired. More often than not, M&A deals eliminate more jobs than they create. Back in 2008 our founder and chairman, Bill Hambrecht, was invited to testify before Congress to recommend specific ways to help companies gain more efficient access to capital. His principal recommendation was to change Reg A to make it easier for companies to access growth capital, because capital creates jobs. It’s especially fitting that the legislation mandating these changes ended up as Title IV of the JOBS Act of 2012.”

Allegiancy: What should investors look for in a Reg A+ offering?

White: “Well, I can’t offer advice about which Reg A+ deals are good investments and which aren’t. I haven’t reviewed all of them, but statistically I’m sure there are a bunch among the 70+ Reg A offerings on public file that investors are best off avoiding. Fortunately, the process of getting on file alone is probably enough to weed out the most speculative companies. For Tier II offerings, up to $50 million, the preparation alone is both time consuming for company executives and expensive. Preparation of a proper Form 1-A and then filing it with the SEC require the help of professionals including lawyers and, often, financial printers, both of whom represent non-trivial expenses. Issuers also need two years of audited financials, and audits are costly and often take weeks or even months to complete. The expense and time commitment associated with preparing for the offering will likely filter out potential issuers who may not have the financial stability or wherewithal to get to market. Another consideration is the presence or absence of an underwriter.”

Allegiancy: What is at stake for these first round companies such as Elio Motors and Allegiancy using the new Reg A+ to start effecting change in raising capital for American businesses?

White: “We’ve got to see successful deals for successful companies. The world is going to look at how the early Reg A+ issuers perform over time to judge whether Reg A+ is a successful framework, which is why we set very high standards for the companies we work with as an underwriter.”

Allegiancy: Any final takeaways on the new Reg A+ and mini-IPOs?

White: “Reg A+ has the potential to be one of the most important positive changes to the securities laws in my lifetime. And I truly hope that it changes companies’ access to growth capital and brings about a renaissance of smaller, earlier IPOs for quality companies who turn out to be the household names of tomorrow.”

About Whitney White — He is a WR Hambrecht + Co Partner and Head of Equity Capital Markets and has been with the company since 2000. White is a recognized innovator and market leader, holding a number of patents for software used by WRH+Co in conducting their ‘Open IPO’ process for clients. In his current role as Head of Equity Capital Markets, White is responsible for the evolution and development of the firm’s capital raising platforms as well as the coordination and execution of all transactions.

Recent Blog Posts:


iGlobal Forum to Host 4th Real Estate Crowdfunding Summit

iGlobal Forum is pleased to present the 4th Real Estate Crowdfunding Summit, taking place in Los Angeles on Thursday, June 23. Allegiancy CEO Steve Sadler is among the speakers, featured on a



Why George Washington and Henry Ford would have loved crowdfunding

George Washington is known as America’s `First Entrepreneur’ and I am fully confident he would have been a huge proponent of crowdfunding and the new Reg A+ rules — also