Raising capital is necessary for many companies, but it comes with a price tag. This is why we often receive questions from companies seeking to understand how to budget for the fundraising process. With Regulation Crowdfunding (Reg CF) issuances becoming increasingly popular in the United States, understanding the costs associated with these offerings is essential to successful capital raising.
To shed a light on this topic, we have worked with our KorePartners to research the estimated budget for a Reg CF offering. However, this estimated budget is based on a variety of factors that can influence the total cost of capital raising. Thus, this information will not apply to all companies but is a general guide to the expenses involved in a Reg CF raise.
Estimated Reg CF Costs for US-Based Companies:
| What | Why/Work to be done | When | Estimated Cost |
| USA Lawyer | To file your SEC Form C and state filings | First step in moving forward | $7,500-15,000k |
| Auditors | Are required to be filed with your Form C | First step requirement | $2,500 + |
| FINRA Broker-Dealer | States require you to have a Broker-Dealer to sell securities to investors | Begin engagement when you start with a lawyer | 3-5% fees + $2,600-$10,000 (these are upfront fees) |
| Escrow Provider | SEC requires that funds be held in escrow during the capital raise for a RegCF | Required to file Form C | $1,000 – $3,500 one time fee
Closing fees TBD |
Investor Acquisition
|
The sooner you can begin to start building your community, the more it increases your company’s chance of achieving your offering goals | Before you file your Form C | $10,000 to $15,000/month
Plus any additional advertising you will do |
| Investor Relations Director | If not already available in house, you may look to hire an internal resource to manage incoming inquiries from potential investors, in order to handle outbound calls to investor leads compliantly. This is only an option to consider | $4,500/month | |
| Data Access | Providers with Data set up to access 1.5B records | $2,500-$5,000 one-time fee
$2.00-$5.00 for investor lead |
|
| KoreConX All-In-One platform | RegCF Solution
|
$550.00/month
$3,500 Set up Fee |
|
| SEC-Transfer Agent | KoreConX End-to-end solution includes the RegCF Investment platform and
SEC Transfer Transfer Agent as required to file your Form C |
Required to file Form C | Included with KoreConX All-in-One Platform |
| Investment Platform for RegCF | Requires 10-14 days to set up | After you retain your lawyer | Included with your KoreConX All-In-One Platform |
| Live Offering | During the live offering you will have to pay for KYC (ID, AML), search fees required | Ranges from $1.50/person-$15/person. With KoreConX these fees are provided at cost and vary depending on country; with no markups | |
| Live Offering | During the live offering you will have to pay for your Payment processors (Credit Card, ACH, EFT, Crypto, WireTransfer, IRA) | With KoreConX these fees are provided at cost with no markups |