What is a Reg A or Reg A+ Fund?
Before we dive into how to market your Reg A or Reg A+ fund, we want to make sure you understand exactly what it is in the first place. In Russell Creative Group’s opinion it is one of the best ways to raise capital due to the ability to market to non-accredited and accredited investors.
Having the ability to tap into those extra investors, and allow for investments as little as $100 per investment, creates the ability to build a crowd-funding style campaign.
Regulation A+ is the recently adopted SEC rule that amended and expanded a rarely used offering exemption named Regulation A.
Regulation A+ can be thought of as an alternative to a small registered IPO and as either an alternative or a complement to other securities offering methods that are exempt from registration under the Securities Act of 1933.
As amended, Regulation A+ provides an exemption for U.S. and Canadian companies to raise up to $50 million in a 12-month period. The rules also make the exemption available, subject to limitations on the amount, for the sale of securities by existing stockholders.
The new rules modernize the existing Regulation A framework by, among other things, requiring disclosure documents be filed on EDGAR, allowing the confidential review of offering documents, and permitting certain “testing the waters” communications.
Regulation A+ provides two tiers of offerings:
Tier 1, which consists of securities offerings of up to $20 million in any 12-month period, and
Tier 2, which consists of securities offerings of up to $50 million in any 12-month period.
How to Market Your Reg A Offering
Marketing a Reg A or Reg A+ Fund allows for so many more options then your typical Reg D fund. We typically suggest to our clients a multi-prong approach to marketing this type of fund. A huge part of this process and campaign includes marketing funnels, email marketing, paid social, paid search, and podcast marketing.
Reg A and Reg A+ Marketing Funnels
A sales funnel takes your potential investors from seeing your brand for the first time, to learning about your product, to being educated on the investment structure, to watching a webinar or downloading content.
The goal of the funnel is to stay as a consistent tap on the shoulder of the potential investor, without annoying or frustrating them.
As long as value is being provided throughout the process, and the prospect feels like they are being rewarded with value or education this becomes easy to move them along the sales funnel process.
Having a great CRM connected to your sales funnel is key during the marketing of your Reg A product. If you don’t have a CRM to manage, build out reports, and dive into the analytics of your potential investors it becomes very difficult to segment out for remarketing.
The sales funnel can be built in different platforms including wordpress, clickfunnels, or leadpages. Our favorite is clickfunnels because it gives you the ability to easily A/B test all of your Reg A or Reg A+ marketing funnels, build out automatic webinars, etc.
Using Email Marketing to Raise Capital for Your Reg A or Reg A+ Fund
There are a lot of people that say that email marketing is dead, but if you look at the numbers and the stats and the data, you would see they couldn’t be further from the truth.
The problem is most people look at email marketing and think it doesn’t work because they purchased a list of 200,000 “accredited investors” and sent out one or two blast emails to that list, typically either getting shut down by mailchimp or constant contact because they are not playing by the rules. Those contacts also have no clue why you are emailing them so they are not responsive and you don’t have permission to do so in the first place so you end up in the their spam filter.
Marketing a Reg A or Reg A+ fund through email marketing to help raise capital is key. It should be the foundation of your campaign. You need a platform like mailchimp or constant contact to build out the email campaigns, create automated responses, and build out drip marketing campaigns that walk them through the fund and how to invest.
There are really two sides of the coins to your email marketing; the potential investor and then the investor segment. You do not want to send the same message to people that have put money into your fund that you are sending out to those that might just be kicking tires or haven’t pulled the trigger yet.
Having the ability to segment out your list so that you can send a very targeted email to those potential investors that have watched a webinar, downloaded your term sheet and looked at your investor portal but haven’t invested yet could be the difference in breaking escrow, or raising $10mm vs. $50mm.
Your email templates should all look consistent so that when they get an email from you they know who it is from, what it is about and why they should take action.
This plays a part in the branding of your Reg A fund, and makes a huge difference in the ability to successfully raise capital or not.
An Introduction to Paid Social Media Advertising for a Reg A or Reg A+ Fund
Ah. The wonderful world of paid social media advertising. This is one of our favorite channels. Why? Because of the scalability and ways you can target your investor demographic.
We have been doing social media advertising for almost 10 years and were more than excited to hear that Reg A and Reg A+ funds would allow us to target individuals that were not accredited.
Creating a social media non-paid and paid strategy is another key element of your capital raise marketing campaign.
If you don’t have a plan for content, for ads, for landing pages you are going to feel like you have wasted your money. If you have a plan for all of this, have a calendar you follow, continue to push out quality content and build out ad campaigns with various creative, ad sets and ad campaigns you will see results.
Creating the ads is the easy part, making sure you target the right demographic is where you need to spend some time planning. You can install the pixel on your website so that you can track people that are hitting your site and remarket to them directly.
Did they download a term sheet, but not take action? Great. Remarket to them more education material about the fund, share stories about the asset or product, and push them to take action. It’s the oldest rule in the marketing book; it’s going to take more than one touch to make some take action. Especially when you are talking about having them reach into their pocket book and pull out a check for an investment they have found on Facebook or Instagram.
You could raise $50mm for your Reg A+ or $20mm for your Reg A fund tomorrow on Facebook and Instagram if you did it right.
What’s your social media plan? We suggest you really sit down and figure this out before your documents are finished and you are ready to start taking investor’s dollars.
Raise Capital with Paid Search for Your Reg A or Reg A+ Fund
Do you have a multi-family Reg A fund? What happens when someone goes to google and searches “Invest in Apartment Building”, or “Invest in Multi-family”, or “Best Investment for Apartments”?
If you’ve built out a solid paid search campaign then your fund’s website or funnel will pop up in the top 3 spots on google, and you will be getting thousands of clicks to your website day one. What happens if you are able to drive traffic to your fund’s website for people that are already interested in searching for your exact type of investment?
Paid search is not an option for your Reg A or Reg A+ marketing campaign, its a necessity.
Building out remarketing campaigns and installing the right tags on your website is so important because people will hit your website and bounce off, but if you continue to show up on other websites they are visiting or in front of a YouTube video they are going to watch, they are reminded of your fund and your investment story and will take action.
Google and YouTube are the top search engines in the world, with millions of people searching every second. Don’t miss out on this traffic for your fund.