RegA+ is a securities exemption that allows companies to raise capital from accredited and unaccredited investors. There has been a lot of interest around Regulation A+ and its potential uses for companies outside of the traditional tech and biotech sectors. In this post, we’ll take a look at how RegA+ could be used to offer equity crowdfunding opportunities for those in the collectibles space.
A Difference in Fundraising
RegA+ funding for collectibles is game-changing and different from the traditional process of raising capital, similar to real estate. This possibility allows issuers to offer collectibles in niche markets to a wide variety of investors who can usually not afford them on their own. Still, these offerings allow passionate audiences to invest in “holy grail” pieces of collecting with the hopes of the collectible appreciating in value. Even in this space, RegA+ for collectibles is closely tied to the theme of democratizing capital and investments. Anyone can participate in an offering and get their share of the pie.
Using RegA+ for Collectibles
Using RegA+ to offer equity funding opportunities for those in the collectibles space allows companies to raise up to $75 million per year from accredited and unaccredited investors. Opening up the opportunity to a much larger pool of investors can be crucial for businesses in the collectibles space, especially when seeking investments for high-worth assets.
However, the entire process is somewhat new and being figured out. For example, some items like autographs and music memorabilia are more tedious to ensure authenticity compared to something like cars, which have easily trackable and verifiable VINs. With almost anything able to be classified as a collectible, it is an interesting thing that the SEC will need to look at.
Considerations of Collectibles Through RegA+
Collectibles are an interesting application of the RegA+ exemption, and there are a few things to keep in mind:
- It allows investors to take part in collections they may not be able to otherwise.
- RegA+ provides a high level of transparency and disclosure for investors.
- More investment opportunities enable the value of collectibles to go up.
- It may be challenging to find interested investors who have the capital to invest in high-value items.
Regulation A+ has opened the doors for a diverse range of companies to receive funding, from real estate to biotech and everything in between. Interestingly enough, one of these opportunities is collectibles. In these scenarios, an issuer will form a company around a collection of certain assets, whether cars, watches, or luxury handbags. Their offerings allow interested investors to own a piece of a collection they’re passionate about that they would not be otherwise able to be a part of.