June 18 2015
Source: Wall Street Journal
Allegiancy Featured In Wall Street Journal: Small Firms Aim to Raise Capital More Easily Under New Rules
Some entrepreneurs and business owners say they’re preparing to raise up to $50 million in capital from investors, without facing the legal costs and financial reporting requirements of going public, taking advantage of new rules that kick in Friday.
The rules grew out of a provision of the 2012 Jumpstart Our Business Startups Act, or JOBS Act, which aims to help fledgling companies raise capital to expand and create jobs.
As of Friday, the rules raise the cap on the amount of equity a business can issue privately, under what’s known as “Reg A” to $50 million, from $5 million.
In addition, they do away with a requirement for businesses raising more than $20 million to pay separate fees and file paperwork to the federal Securities and Exchange Commission, as well as regulators in every state where investors purchase shares. The offerings are open to mom-and-pop investors.
“This is going to be huge and we want to get in early,” Steve Sadler, chief executive of Allegiancy, a Richmond, Va., firm that manages low-rise office buildings, said about the new rules.
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