If you look at the ways in which small businesses often raise capital, you would realize that many small businesses opt for a venture capitalist investment. However, if you look into the percentage of business owners who are opting for reg a+ offering, you would realize that they are few and far in between. However, when mini ipo you're comparing both the types of capital raising you would realize that the regulation a+ offering has more advantages as compared to the venture capitalist investments. We would today be comparing venture capitalist investment with the regulation a+ offering and providing you with the details as to why reg a+ offering is better.
1. Capital can be raised to force local companies:
When you're approaching the venture capitalists, normally they would be needing the companies which are growing at a pretty fast pace. On the other hand, if you're looking at the regulation a+, you would realize that you would be able to raise the capital even for companies which are growing at 10% to 15% annually. This would make it much easier for you to raise the capital for your business. Moreover, you would not be having the added pressure of growing your company manifold in a certain period of time. Sure enough, you would also try to grow your company as fast as possible but it would have realistic expectations from your investors.
2. Taking the company public:
Venture capital would not help you in taking the company public. It would be remaining private. However, when you're looking at regulation a+ you can be sure that you would be able to take your company public to a certain extent. This would ensure that you are able to spread the word out about your company quite easily.
3. Easy to deal with investors:
When you're looking at the investors in venture capital raising, you would realize that it is very difficult for you to indulge with those investors. Moreover, they would be having their own set of expectations and if you're not able to fulfill them, they would not be happy.
On the other hand, whenever you're taking the company public with the help of regulation a+, you would realize that it is much easier for you to handle those investors. Also, those investors would not be pressurizing you to a greater extent in order to achieve certain benchmarks. That is why you would be able to grow the company at your own pace rather than compromising with the strategy in order to grow the company.
So, if you're directly comparing venture capital fund raising as compared to the regulation a+ fund raising, these are the 3 reasons why the regulation a+ fundraising is better.