Choosing Between Regulation D and Regulation CF: An Attorney's / Syndicator's Analysis

Tilden Moschetti: There is a
reason why 4.6 times more

private exempt securities
offerings are put under

Regulation D than Regulation CF.
Let's go through what those

differences are so that you can
make your own decision on what's

best for your security offering
when you're choosing an

exemption between Regulation D
and Regulation CF.

So when the big showdown is
between Regulation D and

Regulation CF, the two major
opponents, when it comes to

exemptions from registration
under the Securities Act, now I

there is another opponent out
there and we'll Asterix like

here, Regulation A does exist.
Regulation A though is a little

bit different, because you still
make a filing, and it's reviewed

and approved by the SEC. So it's
not like a true like file a Form

and you're automatically exempt.
So it's a different kind of

opponent. But two big opponents
are Regulation D and regulation

CF. Now, let's talk about the
stats and the differences. In

one corner, we've got Regulation
D, the heavyweight champion of

the world, with 4.6 times more
knockouts than Regulation CF.

Why 4.6? Well, first, you've got
Regulation D breaks up into two

different rules. And one of one
of those rules is the rule that

you'll pick, if you go with
Regulation D, in one corner,

you've err in one hand, you've
got rule 506b 506. B is great.

It's also concert called friends
and family because you can take

non accredited investors up to
35. And then a 90 day period,

and an unlimited number of
accredited investors, you can

also raise an unlimited amount
of money, you're not stopped at

5 million, 1 million, anything,
you can raise $1 trillion. If

you can, if you can give me a
call, definitely we need to

partner up because $1 trillion
is a lot of money. And if you

can raise that much, well, I
want you on my team. But that

aside, Regulation D rule 506b,
so the other fist is a great

regulation, we can raise an
unlimited amount of money from

an unlimited amount of
accredited investors and the

knockout punch for it, you can
advertise so you can put a

billboard on Main Street, you
can plaster the internet with

ads, just to get your name out
there and get your investment

out there. The big trouble with
506c, the one where it gets hit

and they've got that rule is
because we can't take any non

accredited investors. In fact,
we actually have to make sure

that each one is accredited by
having third party verification.

But having the ability to raise
an unlimited amount of money

getting to choose between
whether we have non accredited

or an accredited investor is a
pretty major win for it doesn't

it sound like 4.6 times more
knockouts. But that's not to say

that there's not a lot to be
said for the other opponent,

Regulation CF. Now, regulation
CF doesn't break out into

different rules like that it
just as one rule. So regulation

CF lets you raise money from
both accredited and non

accredited investors. It lets
you advertise. Now, what's the

problem with Regulation CF? Why
isn't it getting more than

Regulation D? Two reasons.
Number one, it's got a cap of $5

million $5 million in any 12
month period, kind of a

negative. The other big problem
with Regulation CF. And to me,

this is the biggest problem, you
still have to do a filing this

time it's on a form C versus a
Regulation D is on a form D your

stuff to do that filing. But
you've got to have all of your

marketing and all of your
transaction go through a

registered portal. Ah, what is a
registered portal, a registered

portal is a third party who puts
your name and puts your

investment out there and take
some of your profit. How much of

your profit I've heard as much
as 10 to 12%, which is a huge,

huge chunk. Now maybe there are
some that are less that take

charge less. But you have to ask
yourself if you're not able to

actually put it out there
yourself. You're still You're

gonna be responsible for
marketing it to drive all your

traffic to this third party
portal, that's not even you, you

don't even get to control that
traffic. So you have to be

driving your own traffic to this
third party portal, where they

also have all of your
competitors investments as well.

And they charge you 10 to 12%
for the privilege, and the

preparation of all the documents
needed for Form C and to comply

with REG CF cost just as much as
that in Regulation D. That's why

when it comes to the ultimate
battle, to me, I think the clear

winner has always been
Regulation D and the stats show

it 4.6 times more, a lot of
people come to me after trying

to do a Regulation CF, it just
didn't work out, it was

expensive. And a complete flop
Regulation D, we can craft a

marketing plan with you to make
sure that your regular offering

is successful. And the the cap
on the lit number of accredited

investor or non accredited
investors isn't that much. If

you've got the right network, if
you don't have the right

network, then you only can mark
it to your right your accredited

investors. But if you've got the
rights pitch, and you've got the

right story, your Regulation D
offering is gonna be successful.

So now it's time for you to make
your own decision on what works

best for what you're offering.
To me. It's always Regulation D.

So if you give me a call,
wanting to talk about what the

two differences are, I'm always
gonna say Regulation D, I'm

happy to have a conversation
comparing and contrasting the

two, but just know I'm always
going to be on the side of

Regulation D, it's the
heavyweight champ and you don't

go against the champ. But I'm
always happy to have that

Regulation CF is a fine choice.
I may be in favor of Regulation

D but it's still a very, very
good choice. Regulation CF

though has those negatives. And
then a plan can be worked out

around those in order to solve
it through Regulation D. Or if

Regulation CF is the right
choice for you. That's great

too. Now if we can help you
either make that choice or if

you need help with your
Regulation D offering, give us a

call and let's see if I can help
you

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