How to Leverage Social Media to Maximize the Success of a Reg A Raise
DealFlow Events has been organizing topical conference events for the institutional financial community for 20 years.
This recap of DealFlow’s latest symposium, The Reg A Conference 2023, is the last in a series of articles.
When the term crowdfunding is used, it is difficult to separate it from the broader use of social media, since social media platforms are the primary means by which crowdfunding campaigns build their respective communities of support and advocacy and communicate amongst themselves en masse.
Andrew Corn, CEO of E5A Integrated Marketing, was a featured speaker at the Reg A Conference 2023. He detailed the innovative and time-tested approaches towards the strategic use of social media to maximize a Reg A capital raise campaign. Describing his methodology as “systematic, data-driven investor acquisition”, he outlined his approach:
- Identifying the right platform to yield conversions: depends on the company, and should test which one (Facebook, Instagram, Twitter, Tik Tok, et al.)
- Successful Reg A raises need to build large audiences and the right audiences, who will stick with the company out of loyalty.
- Issuers need to be able to see both Android and iPhone – Apple ad tags will be gone in August, so proper preparation is required to monitor both.
- Repetition is the key to convert fans into shareholders.
- Limit the number of times an ad can be seen per day, but timing is of paramount significance, and repetition of the name but changing the context is important to avoid fatigue.
- YouTube, Reddit, Facebook and Google are good media platforms.
- Good content drives better SEO.
Corn also stressed some of the ways social media and digital marketing has irreparably altered marketing strategies and communications. For example:
- New media metric: “Like Love Comment Share”.
- After cleavage, babies and puppies generate the greatest number of clicks on social media; statistically validated – not a joke.
- The fleeting nature of digital social media makes all the more important the notion that prospects must feel closer to you with emotion and authenticity in order to foster their continued loyalty and advocacy.
One “old school” short cut that Corn mentioned was the tried-and-true stockbroker use of first party data (doctors and dentists, people with pilot’s licenses, people who sold businesses, retirees, etc.) to focus on demographics to get the “right” audience.
Regulation A Financial Statement Reporting
The finale to the DealFlow Events 2023 Reg A Conference was delivered by Gino Scipione, CPA and Partner at Cohen & Company. His presentation focused on details related to financial statement reporting, in addition to the offering circular format:
- The audit is critical in the Reg-A process and is the primary gatekeeping item for SEC approval.
- Financial statements must be in US GAAP. The SEC will accept international reporting standards, but these must be stated in the offering docs.
- FASB changes have to be adopted first by public companies. Reg-A companies have some delay latitude if reported.
- Reg S-X, Article 8 rules small company reporting compliance for Tier 1.
- Article 2 rules likewise for Tier 2. An auditor must be independent from your bookkeeping, etc. like with a public company.
- Article 8 governs compliance for interim statements (issued quarterly).
- If there is a guarantor, that entity must also have its financials included for submission.
- Balance sheets for the last two most recent fiscal years are required.
Scipione also discussed additional disclosures that might apply to some companies, depending on sector and ownership history, and ended with a compliance checklist review – essential to the well-prepared Reg A offering.
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