The RVA craft brewery scene has been quite prolific in recent years with no immediate signs of slowing down. As these startups mature into emerging growth companies (or simply look to maintain their market share in an increasingly competitive marketplace), raising capital becomes a major topic of strategic planning and discussion. The good news is that small business owners can pursue a variety of capital-raising strategies, and tapping into the private equity or debt market through a Regulation D private offering can be an attractive and cost-effective way of raising capital.
In particular, Rule 506(c) of Regulation D offers companies the following benefits that any local craft brewery in search of capital should be aware of:
1. The ability to raise an UNLIMITED amount of money without having to navigate the expensive and time-consuming SEC registration process.
2. The ability to raise money from an unlimited number of accredited investors (see the article on my website discussing just about everything you need to know about accredited investors).
3. The ability to freely advertise your offering (social media, newspapers, periodicals, seminars, etc.).
4. The ability to avoid most state-level securities regulation (other than notice filing and fee requirements) during the offering process.
5. The ability to market and sell the offering yourself (without third-party intermediaries) under certain circumstances. In some situations, however, you might want (or need) to sell through third-party broker-dealer firms to have a successful offering.