Companies, large and small, rely on Regulation D of the Securities Act of 1933 to conduct private capital raises. Reg D is simply an exemption which allows companies to raise funds without engaging in the process of “going public.” While Reg D does offer a more cost effective means of raising capital, it does create some barriers a public offering does not. With some exceptions, investors in Reg D private placements must be accredited. Accredited investors must meet one of several criteria focused on net worth and income. Additionally, the number of investors in a Reg D offering is limited. This number will be increased with the implementation of the recently passed JOBS Act.
Because of these barriers, Reg D offerings have typically had limited distribution. FNEX enables companies, and the investment banks serving them, to reach a large crowd of potential investors previous to the enacting of the JOBS Act legislation. FNEX offers investors the ability to see private placements, previously only available to the wealthy.
For information regarding Reg D please go the link below:
In short, all types of businesses. Even publicly traded firms can conduct private placements. For information about trends in private placements click the link below.
Private offerings are cost-effective and allow firms to raise funds without incurring the ongoing regulatory costs associated with publicly traded firms. For more information on why firms stay private see the link below: